Amazon Prime shipping could shrink to just one-day

Fredrick Soto
April 27, 2019

Chief Financial Officer Brian Olsavsky said Thursday the company plans to move away from two day shipping and make one day shipping the norm.

The announcement comes after Amazon has already added same-day and one-day shipping to many of its markets, as well as two-hour deliveries through its Prime Now program.

Amazon's latest earnings conference call included the reveal of a major shift for the paid Amazon Prime subscription service: an "evolution" to one-day shipping as a nationwide default.

Amazon, which hooked shoppers on getting just about anything shipped in two days, said this week that it will soon promise one-day delivery for its U.S. Prime members on most items. Overall, first-quarter sales rose 17 per cent to US$59.7b, compared to sales growth of 46 per cent past year.

While Olsavsky did not provide a concrete timeline for the program's rollout, he said, "We expect to make steady progress quickly and through the year".

Prime customers already get free one-day delivery in some parts of the UK.

The company has been building warehouses around the world to ensure its edge in delivering goods to customers the fastest.

First-quarter earnings were US$7.09 a share, the Seattle-based company said Thursday in a statement.

Global online marketplace Amazon has grown its net income 118 per cent during the first quarter of 2019, from US$1.6 billion to US$3.56 billion ($2.28 billion to $5.07 billion).

"Amazon has kicked off its fiscal year with a solid set of results which signal its continued market share advance into both the product and services sectors", said Neil Saunders, managing director, GlobalData Retail.

In response to our inquiry about closures of some fulfillment centers, an Amazon spokesperson provided no details.

Walmart and Target offer free two-day shipping for those who spend over $35 on their website.

More than half of the company's merchandise is sold by third-party sellers.

Amazon said it employed more than 630,000 workers during the first quarter, a 12 per cent increase from the year before.

Net sales rose 17 per cent to US$59.70 billion, beating the analysts' average estimate of US$59.65 billion.

There are signs that the company's growth is slowing, even in its cloud and advertising businesses. That number, like AWS revenue, came in right where analysts had expected.

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