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Amazon-Stripe partnership

(stripe.com)
258 points polyrand | 7 comments | 23 Jan 23 15:38 UTC | HN request time: 1.548s | source | bottom
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aabhay ◴[23 Jan 23 16:01 UTC] No.34490445[source]▶
In enterprise, it’s often the case that your biggest customer effectively owns you. They get to dictate roadmaps, you’re forced to spin up a special team just for them, and it becomes harder to justify your investment into long tail customers because this big golden monkey is on your back.
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1. ketzo ◴[23 Jan 23 16:47 UTC] No.34491293[source]▶
I worked briefly at FedEx corporate, and they made a big deal about their policy that a customer could never account for more than 30% of total volume.

Leadership often made it clear that Amazon was right at that limit, and wanted to send a lot more volume, but FedEx wouldn't let them, in order to maintain "independence."

To your point: it didn’t stop them from working to cater to Amazon’s every whim, and it did provide Amazon the incentive to build a (better and more cost-effective) fulfillment and shipping network themselves.

I don’t know what the “right” play was, and obviously the story is far from over. But FedEx always seemed to me like they chose the worst of both worlds.

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2. mritchie712 ◴[23 Jan 23 17:00 UTC] No.34491541[source]▶
What % of FedEx revenue was from Amazon? Would have guessed it'd be much less than 30%.
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3. ketzo ◴[23 Jan 23 17:11 UTC] No.34491717[source]▶
I wasn't high-up enough to have that kind of number, sadly :D

It's an interesting question, though -- I'm sure Amazon had a very favorable contract, so to your point, probably less than 30%.

4. Laremere ◴[23 Jan 23 17:47 UTC] No.34492253[source]▶
Amazon was likely to build out their own shipping network anyways. Their MO in all other spaces is to observe others doing it, then undercut by vertically integrating.

Over expanding to fullfil a single large customer who isn't actually reliant on you is a good way to end up bankrupt. Seems like FedEx made the right move here.

5. scottyah ◴[23 Jan 23 17:57 UTC] No.34492426[source]▶
In 2018 (latest I could find with a quick search), it was 1.3%. FedEx said that no customer is more than 3% of their revenues.
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6. ketzo ◴[23 Jan 23 18:29 UTC] No.34492899{3}[source]▶
Wow, that's a lot lower than I would have thought. I wonder if my memory is wrong? The "30% of volume" stat stands out in my head, though.
7. BonoboIO ◴[24 Jan 23 02:19 UTC] No.34498260{3}[source]▶
Maybe they count each Amazon sub company as one customer.