When does a line of revenue for your business become problematic?
How do you decide when to “fire” a client and increase your capacity for more profitable revenue?
In these times of disruption, these are questions business owners will have to consider often and make tough decisions.
It’s easy to be busy, yet unprofitable.
In June, FedEx ceased its contract with Amazon for U.S. air freight, followed by an announcement of an early termination of ground delivery.
In a Bloomberg article on August 7th 2019, author Brooke Sutherland raised the question of whether the relationship between Amazon and FedEx had ever been a two way street. As Amazon has grown and shortened delivery turnaround, especially for Prime members, it quickly became FedEx’s least profitable customer.
According to a Wall Street Journal article published November 26, 2018, between Thanksgiving and Christmas the volume was 31 million packages per day – nearly twice the daily average volume. FedEx made the bold decision to “fire” Amazon and focus on growing the e-commerce segment with other business partners.
Amazon is now growing its own fleet, but not without growing pains. In a September 2018 Forbes article, the estimated average of packages delivered by an Amazon driver is 200 in an 8 hour period, or approximately a package every 2.5 minutes. That’s before the change from 2 to 1 day for Prime members free delivery.
Hidden cameras have followed the delivery drivers in some cases and shared the challenges of meeting such a tight schedule. It’s not pretty.
Have you read “Capitalism without Capital” or “The Great Game of Business”?
In 2019, YES is hyper-focused on how these macroeconomic changes are affecting how we grow our businesses.
Join us at our next CEO Symposium on September 19, as we meet three CEOs with very different businesses, and learn how they are thriving in the ever-evolving business climate.