Amazon’s one-day shipping lifts startups serving Walmart

Bloomberg

Amazon.com Inc’s pledge last month to pump $800 million into making next-day delivery the new standard upped the pressure on its brick-and-mortar rivals to spend more trying to catch up all over again.
That’s good news for logistics startups helping Walmart Inc, Best Buy Co, Macy’s Inc and other retailers compete online. These upstarts, often led by Amazon alumni, say their phones are ringing with new inquiries and that venture capitalists are keen to pony up.
Seattle startup Flexe, which operates a marketplace for warehouse space and online order fulfillment, announced a $43 million investment led by New York firm Tiger Global. Dolly, another Seattle startup, recently announced $7.5 million in fresh funding to expand to new cities and start delivering televisions, sofas, appliances and other big items for the likes of Lowe’s Cos and Costco Wholesale Corp. Dolly was originally a marketplace for movers.
Retailers that struggled to match Amazon on two-day deliveries have to spend big yet again to further cut delivery times. Amazon will capture almost half of the $600 billion US shoppers will spend online this year, according to EMarketer Inc, and retailers have to match its delivery speed to keep that dominance from growing.
“Interest in logistics investments has picked up, and we’ll see even more of that this year,” says Julian Counihan, a partner at Schematic Ventures in New York. “Retailers traditionally invested in physical stores to increase sales. Amazon flipped that on its head and made logistics the driver of customer experience.”
Flexe, which counts Walmart among its customers, aims to double in size to more than 160 people this year to keep up with demand. It hired former Amazon transportation vice president David Glick as chief technology officer to expand its e-commerce fulfillment business, which now accounts for three-fourths of all sales.
Flexe rents out space and services in more than 1,000 warehouses, providing an alternative to Amazon’s logistics services.
Flexe helps warehouse owners and operators utilise empty space and idle workers by connecting them with retailers requiring flexibility to manage seasonal demand. Ace Hardware, for instance, used an organic tomato farm’s warehouse in the winter to stockpile imports since weather delayed the usual start of the spring home improvement season.
“Having big customers like Walmart known for high standards brings legitimacy to our business,” Flexe CEO Karl Siebrecht says.
Dolly’s focus on delivering big, bulky items is something Amazon is still trying to figure out. Amazon retail CEO Jeff Wilke, whose job includes challenging Wayfair Inc in online furniture sales, boosted his own personal investment in Dolly in the latest round, which was led by Unlock Venture Partners. Dolly offers furniture moving and delivery services in 11 US cities, including San Francisco, Los Angeles and Chicago.
The company connects retailers and customers with 10,000 independent contractors who move and deliver the items.
The interest will only keep heating up as the busy holiday season approaches and retailers look for ways to keep Amazon from gobbling up more sales.

Fraud hits Amazon sellers as hackers siphon funds
Bloomberg

Amazon.com said it was hit by an “extensive” fraud, revealing that unidentified hackers were able to siphon funds from merchant accounts over six months last year.
Amazon believes it was the victim of a “serious” online attack by hackers who broke into about 100 seller accounts and funneled cash from loans or sales into their own bank accounts, according to a UK legal document.
The hack took place between May 2018 and October 2018, Amazon’s lawyers said in a redacted filing from November that can now be made public.
Amazon said it was still investigating the compromised accounts and believed that hackers managed to change details of accounts on the Seller Central platform to their own at Barclays Plc
and Prepay Technologies Ltd, which is partly owned by Mastercard Inc, according to the filing.
Amazon found the accounts were likely compromised by phishing techniques that tricked sellers into giving up confidential login information.
An Amazon spokesman said the company had finished its investigation of the incident.