E-commerce giant Amazon (AMZN) said on Thursday that it’s in talks with the U.S. Postal Service (USPS) about renewing its partnership before the current contract ends in October 2026. However, according to The Washington Post, the new Postmaster General, David Steiner, wants to hold a reverse auction in early 2026. This would allow other companies to bid for access to USPS facilities, which means that Amazon would no longer have exclusive access and would need to compete with national and regional shipping firms. The move caught Amazon off guard, as the two sides had been negotiating for nearly a year.
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Unsurprisingly, Amazon is currently USPS’s biggest customer and has brought in over $6 billion in 2025, or about 7.5% of the agency’s total revenue. Amazon says it’s open to increasing its business with USPS and hopes to keep its 30-year partnership going. Nevertheless, due to the uncertainty caused by this new auction plan, Amazon is reviewing all its delivery options in order to make sure it can still serve its customers reliably. USPS hasn’t commented yet, but losing Amazon would be a major blow, especially since the agency has already faced an 80% drop in first-class mail volume since 1997.
Meanwhile, Amazon is strengthening its delivery network. In fact, it handled 6.3 billion parcels last year (just behind USPS’s 6.9 billion) and could surpass USPS by 2028 or even sooner if their partnership ends. Moreover, the company’s large warehouse network and mostly non-union workforce help it keep delivery costs down. Amazon is also investing over $4 billion to expand its rural delivery in the U.S. by the end of next year. Meanwhile, USPS is under financial strain and posted a $9.5 billion loss last year. President Trump has even suggested merging USPS with the Commerce Department after calling it a “tremendous loser.”
Is Amazon a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 43 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $295.63 per share implies 29.8% upside potential.
