Don’t look now but Amazon is setting up an airline.
Not content with doing everything from selling groceries, to handling data warehousing to making award winning TV shows, Amazon is taking to the skies with Prime Air.
Don’t get too excited. Hyperactive chief executive Jeff Bezos, who has already been experimenting with drones, isn’t offering passenger flights. Yet.
Prime Air will consist of cargo planes. The first of a 40 strong fleet will make its debut at an air show in the company’s hometown of Seattle.
However, given Amazon’s propensity of entering and disrupting businesses, would you put it past Mr Bezos to launch an experiment with passenger planes in future? Airlines all too frequently offer a miserable service to their customers. Their's is an industry ripe for a bit of disruption from an enterprising new entrant.
For now, however, Prime Air’s job will be to assist with the already rapid deliveries offered to those who sign up to company's Prime service. The fleet will help the company to provide one and two day package delivery in the US.
Such an "insourcing" move, which will tighten Amazon's control over its delivery network, amounts to a reversal of traditional business practice.
More conventional companies typically like to outsource everything outside of their core functions. Why do it ourselves if we can get someone else to do it cheaper for us? What? Customers might suffer? But if we outsource we can blame someone else if anything thing goes wrong. There'll be a bit of tit for tat between us and our service provider before the customer gives up. Result!
It’s this sort of thinking that has made dealing with large businesses such a thoroughly miserable experience. When the customer wants to speak to someone they'll be lucky if they end up getting routed through to a calls centre on the other side of the world. If they ever get past the automated phone menu.
When they do reach a call centre, the chances are they’ll be referred back to the corporate website’s Frequently Asked Questions section. Which will be similarly unhelpful.
Small wonder that Government has been so keen to adopt outsourcing on grounds of “cost” and "efficiency". The cost being any last vestiges of goodwill on the part of the customer (or the taxpayer). The "efficiency" is the speed at which they give up after being driven to distraction.
It’d be nice if I were exaggerating, but I’m not. With the help of Google, you can read any number of horror stories told by people who have had the misfortune of having to deal with companies, or Government departments, that outsource.
Amazon is doing it the other way around. OK it's leasing the planes, a fairly common arrangement, but that’s about as anyone else will be involved with Prime Air. And Prime is a brand which it is keen to protect given its importance to Amazon’s business.
What Amazon is saying is that we can handle our deliveries more cost effectively and efficiently than anyone else can. We’ll also do a better job for customers than those companies that are so keen on outsourcing. I just hope Amazon can achieve this laudable aim without making its workers miserable (hey Jeff, happy workers can make for happy customers).
As for those companies competing with Amazon? They might find that there is a cost to their complacency if they fail to work out that there are efficiencies to be gained by taking control of their own business processes.
