Amazon to Acquire Stake in UK Delivery Firm

  1. Amazon Amazon to Acquire Stake in UK Delivery Firm Amazon has taken the first steps to solve the shipping snafu they experienced during the 2013 holiday season.

The retailer has just signed a deal to buy a 4.2% stake in Yodel, a UK-based delivery firm. The deal is going to cost Amazon around £8.7 million, giving the delivery company a value of  £207 million.

Yodel is primarily owned by Barclay. It's based in Hatfield, Hertfordshire, and it is reportedly the second largest shipping service in the UK (after the recently-privatized Royal Mail). It originated as the delivery division of Littlewoods,  another part of the Barclay business empire, and it ships more than 135 million packages each year. Yodel owns and leases more than 5,000 trucks and employed more than 16,000 people delivering 14 million packages during the 2013 Christmas season.

Amazon is not buying a controlling interest, but I would not be surprised if that were their long term goal. Amazon is one of the largest shippers here in the US, and they are probably in the top 5 shippers in the UK.

But before Amazon buys the company, Yodel is going to have to do something about their customer service. A recent poll showed that 58% of customers who had goods delivered by Yodel rated the experience "bad", while only 22% reported a good experience. Luckily this is something Amazon can help fix, which might explain why Barclay was willing to sell a stake in the firm.

Even if Amazon doesn't buy Yodel outright, I still think this deal is a sign that Amazon is going to launch their own shipping service. The retailer has long since grown past the point where it made business sense for Amazon to build and manage their own warehouses, and I think they could be at the point where they are shipping so many items every day that owning their own delivery service could reduce their costs and improve their customer service.

Sure, Amazon's drone program and their Sunday delivery deal with the US Postal service has been getting all the press, but the vast majority of packages are delivered the old-fashioned way, and that means a delivery service with trucks and drivers.

Amazon's minority share in Yodel gives them the opportunity to pick the brains of Yodel's management, which will prove useful when or if Amazon launches their own shipping service.

The Guardian

Nate Hoffelder

View posts by Nate Hoffelder
Nate Hoffelder is the founder and editor of The Digital Reader: He's here to chew bubble gum and fix broken websites, and he is all out of bubble gum. He has been blogging about indie authors since 2010 while learning new tech skills at the drop of a hat. He fixes author sites, and shares what he learns on The Digital Reader's blog. In his spare time, he fosters dogs for A Forever Home, a local rescue group.

2 Comments

  1. […] comes as no surprise. Amazon showed their interest in owning their own delivery service when they bought a stake in Yodl, the UK delivery service, last month. As I said at the […]

    Reply
  2. […] to benefit from Amazon’s attention; Amazon also acquired a small stake in UK-based Yodl in March 2014. Amazon is estimated to ship around 50 million packages a year in France, putting them about twice […]

    Reply

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