FedEx Affects the Cost of Doing Business for Online Retailers

FedEx
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There is an enormous interest in people having things delivered to themselves. It does not change, one iota, the input costs of the delivery. FedEx is pushing for price increases. Knowing that and what you know about the laws of demand and supply, analyze the statement critically.
The increase in the input costs is the delivery system of FedEx will affect the cost of doing business for online retailers that rely on the services of the company. The company needs to get a return on investment, having rolled out huge investments to improve the supply chain and logistics services. Stevens (2016), reports that FedEx benefited from utilizing the route density and revenue per delivery stop better compared to the competitors. Even though, e-commerce platforms are increasingly popular more than ever before, the FedEx executives stated that the retailers ought to have some of the input cost associated with the company’s expansion (Stevens, 2006). The laws of supply and demand laws will be used to analyze the case for retailers to pay more of the shipment costs.
Increasing the input costs results in a rise in prices charged to retailers. The law of demand highlights that there is an inverse relationship between the quantity of goods demanded and prices (Arnold, 2008). Hence, in this case, the retailers will likely demand less of the FedEx services as the transport costs rise. The retailers who require the services of FedEx will likely reassess the options available because of the higher shipping costs. E-commerce users will be less willing to purchase products because of the higher costs. This implies that they will receive fewer services for the same amount of money spent.
FedEx will be more willing to increase business opportunities when retailers pay more for services since this translates to higher profitability. As more business raise shipment and delivery costs , firms with multichannel services have a competitive advantage over those that rely on few delivery channels (Bond, 2014). FedEx then offset the high cost of capital expenditure to improve the logistics and supply chain management. There are few benefits for FedEx to continue absorbing the high delivery costs, and FedEx would be more willing to provide more delivery services. However, this may be counterproductive since the clients would be wary of increasing the shipment costs, and this is particularly for t...