Earlier this week, the CEO of Amazon announced (see here) that any business can now use Amazon Supply Chain Services, a freight, distribution, fulfillment, and parcel shipping network, without needing to sell on Amazon. Translation: Amazon is selling the logistics infrastructure it built up to support its massive retail operation to other businesses. This wasn’t news to me. Honestly, it was really more branding. I think these services existed already, but they were offered separately. They’re now all housed under a single roof, Amazon Supply Chain Services.

After reading the announcement, I dug into their parcel shipping service, Amazon Shipping. This is their version of last-mile delivery, and it’s competing with UPS Ground and FedEx Ground. An Amazon driver will pick up packages from a business and deliver them to the designated recipient, who didn’t necessarily purchase anything on Amazon’s website. It’s truly a stand-alone small-parcel delivery service. I found two tables: base rates (see here) and discounted rates if you ship 150 packages a day (see here).

Having spent millions shipping with UPS and FedEx Ground in my company, I’m familiar with ground rates and how they impact the available strategies a brand can leverage to distribute products to customers. For example, for many brands, the cost to ship a low-priced item to a customer’s doorstep (say, $15 for a $20 item) makes a direct-to-consumer distribution strategy impossible. Instead, they rely on big retailers like Walmart and Target who have tons of stores and steady customer traffic. A brand can ship hundreds of units to each big box retail store, reducing its per-unit shipping cost to something like a few cents instead of $15. The caveat is that they have to sell the items to Walmart and Target at significantly lower than MSRP (usually 50%) so the big stores can make a profit. Brands give up margin and owning the relationship with the customer (among other things) in exchange for larger orders from a handful of huge retailers. I’m oversimplifying, but you get the gist.

When I looked at the rate table for Amazon Shipping, I saw something new. A brand has to ship only 150 packages a day (a modest number) to earn a substantial discount. Shipping a one-pound package within 150 miles goes from costing $12 to costing $6.50. That’s a massive discount. And if a brand is shipping more than 300 packages a day, Amazon will negotiate a custom lower rate.

This is a big deal because it changes how some (not all) brands can think about their distribution strategy: they can now consider direct-to-consumer. Especially brands that sell small, light items that have lower retail price points. Amazon Shipping makes it possible for those brands to profitably ship directly to consumers. More operational complexity comes with this, for sure. But for some brands, it might be worth it, especially if they want to own the relationship with the end buyers of their products.

Amazon Services isn’t new; it’s been around for about two years. But its latest pricing structure and discounted rate transparency are game-changers, and I think it could impact how brands develop their strategy for selling and getting their products in the hands of customers.