Both companies are mixing wholesale and retail e-commerce with extensive logistics operations, a trend B2B as well as retail organizations should keep an eye on.

Would it make sense for Amazon to acquire FedEx? It’s a possibility worth keeping an eye on.

It didn’t seem to create much of a stir back in mid-December when FedEx Corp.—a major provider of shipping services to online merchants—acquired Genco, a shipping services provider specializing in reverse logistics—the business of receiving from retailers excess merchandise returned from customers or goods the merchants couldn’t sell in the first place. The reverse logistics business provides Genco with merchandise that it wholesales to other merchants and corporate customers through and retails to consumers through the discount e-commerce sites

In other words, FedEx, through its new Genco subsidiary, is now involved in e-commerce as a merchandise wholesaler and retailer as well as a provider of shipping services. That expansion of FedEx business reach is undoubtedly one reason why, according to multiple sources, FedEx paid about $2 billion for Genco. The ability to sell retailers’ excess merchandise through its own wholesale and retail e-commerce sites makes the business of handling reverse logistics more profitable. “That’s what makes the supply chain more efficient—to have the liquidation integrated into the reverse logistics,” Genco senior vice president Ryan Kelly said at the time. “It’s “one of the ways we stay ahead of the game.”

Now another big name is making new moves in logistics, and it is definitely causing a stir. Inc. has taken steps of late to build a logistics infrastructure and services network, including registering as a provider of freight-forwarding services for manufacturers wanting to ship from factories in China to international destinations, which, of course, could include businesses and consumers who buy from Amazon’s websites. That could provide Amazon with advantages in coordinated e-commerce and shipping operations.

By themselves, these moves by FedEx and Amazon are worth noting as developments that could bring them rewards and make them even more competitive.


But Amazon’s dominance in e-commerce invites conjecture on where else it may be heading. One industry observer, Bloomberg News columnist Brooke Sutherland, who covers the strategies behind mergers and acquisitions, raises the possibility that Amazon could make a play for FedEx, bringing the formidable carrier (and now online wholesaler/retailer) under its wing, adding to Amazon’s network of distribution centers, a fleet of trucks and other assets and alliances for long-distance as well as local deliveries.

But even if Amazon doesn’t go that far and entertain what even for Amazon would be a huge undertaking, it could certainly make sense for it to acquire relatively small regional carriers and shipping services operations. That would further ratchet up its dominance in e-commerce and fulfillment. It’s something worth watching out for.