NEW YORK (TheStreet) - Amazon (AMZN) reportedly has the option to acquire a 4.2% stake in Yodel, the U.K.'s second largest delivery service behind the Royal Mail, according to The Guardian. This is the latest example of Amazon furthering itself into the the shipping and logistics industry, as it looks to cut its largest expense.
Amazon's net shipping costs were $3.54 billion in fiscal 2013, up 24% from the year prior, according to its annual 10-K filing. "We expect our net cost of shipping to continue to increase to the extent our customers accept and use our shipping offers at an increasing rate, our product mix shifts to the electronics and other general merchandise category, we reduce shipping rates, we use more expensive shipping methods, and we offer additional services," Amazon said in the filing.
As more customers use Amazon, specifically by signing up for Amazon Prime, its two-day shipping service, the online retailer is looking for a way to contain -- and control -- shipping costs while continuing to provide the convenience factor for those who purchase everything from DVDs to diapers through its Web site.
"We seek to mitigate costs of shipping over time in part through achieving higher sales volumes, optimizing placement of fulfillment centers, negotiating better terms with our suppliers, and achieving better operating efficiencies," Amazon said in the 10-K. "We believe that offering low prices to our customers is fundamental to our future success, and one way we offer lower prices is through shipping offers."