Abstract

Logistics services and their providers are helping intermediaries add value to Internet supply chains in ways that are not always immediately obvious. Thus, it is not surprising that there is confusion among academics and practitioners about how best to extract value from such services and providers. This article reports the results of a study of the role and value of logistics services and their providers. It reveals that Internet sellers establish relationships with logistics service providers in order to extract value from the providers’ network of logistical resources and better fulfill their customers’ orders. Internet sellers establish these relationships to lower the costs they would incur if they attempted to carry out the logistics services internally. They also seek such providers in order to access strong networks that bundle many complementary logistics services among Internet sellers, their customers, and their vendors.