Amazon (AMZN) One Step Closer to Owning Its Distribution Chain - Baird

Baird analyst, Colin Sebastian, has been vocal in his belief that Amazon.com (NASDAQ: AMZN) intends to buy/build out its own distribution chain. The news today suggesting Amazon has acquired France' Colis Privé brings this one step closer to reality. No change to $710 PT or Outperform rating.

According to reports, Amazon that it will acquire French package-delivery company Colis Privé offering more evidence to support the thesis that Amazon will not only build out its own transportation and logistics network, but also offer these as services to third parties. As a reminder, Baird has sized the long-term logistics market opportunity in the $400 billion area, similar to the AWS opportunity.

According to the Seattle Times, Amazon will close its acquisition of Colis Privé in Q1, and will continue to deliver packages in the region for other companies, including retailers. This signals a potentially faster roll-out of ATL than originally envisioned.

The build-out costs for a broad logistics offering may be substantial but Amazon has an advantage in the market by managing the logistics of its own core revenue-generating business, then extending that capacity as a service to other companies. Given the scale of Amazon's own first and third-party retail operations, there are potential efficiency gains from internally operating fulfillment, logistics and delivery, as well as service benefits of controlling the full customer experience.

For an analyst ratings summary and ratings history on Amazon.com click here. For more ratings news on Amazon.com click here.

Shares of Amazon.com closed at $607.05 yesterday.

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