To Understand Amazon’s Delivery Ambitions, Consider the Long Game

We reported some news on Thursday about Amazon.com Inc.’s new experimental delivery service called Seller Flex. It entails Amazon taking greater control over the final mile of delivery from the warehouses of its merchant partners to the doorsteps of customers, and it could have big implications. It can be surprising to see the market react to subtle moves by Amazon (UPS and FedEx both dropped a bit), but below are a few takeaways to help understand why investors get skittish when they discover Amazon is eying someone else’s business.

First, a quick primer for folks who only know Amazon by its website and boxes: The company distinguished itself in e-commerce by offering quick, free delivery to Amazon Prime members who pay $99 a year. It continues to expand its network of warehouses around the country to store a growing assortment of products closer to shoppers. Many sellers on Amazon’s site send their products to Amazon warehouses because the company can stow, pack and ship them more quickly and affordably. Now Amazon is looking to help those same merchants make deliveries directly to the customer.