Amazon plans to slash delivery times

Saturday, 27 Apr, 2019

Amazon did not say when it plans to offer Prime one-day shipping.

The company hopes that cutting delivery times in half will make its $119-a-year Prime membership more attractive, since almost every other online store offers free deliveries in two days.

"Our goal is to evolve the two-day free shipping program into the one-day free shipping program, and we're making strides on that", Brian Olsavsky, Amazon's CFO, said on a conference call with analysts Thursday after the company reported record quarterly earnings.

Olsavsky did point out that Amazon has offered Prime members one-day shipping on select items for years. "We (are) again, trying to take advantage of the fulfillment capacity and transportation capacity, especially with third-party partners, that we have".

Amazon revolutionized online shopping and quickly became one of the most ubiquitous and successful businesses in the world.

"While AWS's momentum continues unabated and is clearly the bigger driver of this profit story at the moment, the advertising flywheel now appears to be in full effect for Amazon and will only be a bigger part of the growth story over the near term", Lipsman said. Total revenue increased 17 percent, the first year-over-year gain of less than 20 percent in a quarter since early 2015.

"Further, investment in one-day shipping is directly going to be a cost that we bear and it's also going to be a direct benefit to sellers as well Prime eligible selection in our warehouses".

Some analysts noted that these growth figures, while impressive, were lower than what Amazon had posted in prior quarters.

Chief Executive Officer Jeff Bezos for years pumped most of the cash generated from Amazon's operations back into new initiatives. "We are working closely with each employee to ensure they are supported during this transition and we look forward to expanding our customer offerings in the months to come".

Amazon, which hooked shoppers on getting just about anything delivered in two days, announced Thursday that it will soon promise one-day delivery for its Prime members on most items.

The company forecast net sales of between US$59.5 billion and US$63.5 billion for the second quarter, the midpoint of which was below analysts' average estimate of US$62.37 billion, according to IBES data from Refinitiv.