Amazon Prime two-day shipping will go down to one day
- Author: Anthony Vega Apr 27, 2019,
Apr 27, 2019, 0:20
Amazon's operating expenses rose 12.6 per cent in the quarter to US$55.28 billion as it invested in electric-car maker Rivian and self-driving auto startup Aurora and continued spending on its Prime program, grocery delivery from Whole Foods stores and original video content.
If you're an Amazon Prime subscriber, you've undoubtedly enjoyed the benefits of free two-day shipping, and it's most likely the reason you even subscribe. Chief Financial Officer Brian Olsavsky made the announcement Thursday during Amazon's first quarter earnings call, as $3.6 billion in profit on almost $60 billion in sales was revealed. "We (are) again, trying to take advantage of the fulfillment capacity and transportation capacity, especially with third-party partners, that we have". For years, Amazon has made expensive bets on new technology and programs, like its $13.7 billion purchase of Whole Foods Market in 2017 to become a player in the USA grocery business.
The Internet retailer follows Apple and Microsoft as one of the most profitable companies in the world, one that is increasingly expanding into a variety of markets.
Amazon's fast-growing advertising business has also become big money maker, selling ads to companies that want their products to show up first when shoppers search on the site.
For the current quarter ending in July, Amazon said it expects revenue in the range of US$59.5b to US$63.5b. In the first quarter, revenue from seller services jumped 20 percent to $11.1 billion, while ad and other sales surged 34 percent to $2.7 billion, the company said.
Some analysts noted that these growth figures, while impressive, were lower than what Amazon had posted in prior quarters.
"We didn't put a lot of new fulfillment capacity or infrastructure in place, at least compared to Q1 of past year, and hiring was moderate", Olsavsky said on a call with investors Thursday. That has given investors confidence the company can continue to expand its profitability, even as fellow technology giants like Alphabet and Facebook see their margins narrow, Thill said. Amazon has not described in detail its thinking behind the bets.
"For a long time, Amazon was the only real player in the game", Saunders said. The new program aims to offer one-day shipping of eligible items to all Prime members by default at no additional cost. Sales were $59.7 billion, compared with $51 billion in the period a year earlier - in line with the average estimate of analysts compiled by Bloomberg.