More Amazon Packages Arrive In A Day Or Less After Hefty Fulfillment Investments

(CTN News) – Despite increased competition in online shopping, Amazon claims it delivers more packages to customers in one day or faster.

A majority of Prime orders delivered same day or the following day in the top 60 U.S. metro areas in the first quarter, according to Amazon. It was approximately 50% in the second quarter of 2023.

After the close of trading on Tuesday, Amazon will report its first-quarter earnings, which will be of particular interest to investors. According to Wall Street, the company is expected to post another quarter of double-digit revenue growth and profits that will more than double from the prior year.

The company has achieved higher profits in recent quarters as a result of cost-cutting efforts, cloud computing demand, and faster fulfillment.

The fast delivery of items is one of the hallmarks of Amazon’s Prime subscription service, which charges members $139 per year for benefits such as two-day shipping and video streaming. According to the company, same-day and next-day delivery should become the standard, and it plans to double the number of same-day delivery centers in the U.S. by the end of this decade.

Earlier this month, CEO Andy Jassy wrote in his letter to shareholders that since we deliver items to customers this quickly, more customers are choosing Amazon to fulfill their shopping needs. “And we can see the results in various areas, including the growth of our everyday essentials business (more than 20% year-over-year in Q4 2023).”

Several studies have shown that consumers who receive one-day delivery are more likely to spend and shop more often.

The pandemic-driven surge in e-commerce led Amazon to rapidly add new warehouses and distribution centers to its logistics network between 2020 and 2022.

As of last year, Amazon has redesigned that network into eight regions instead of a national model, which the company claims has resulted in faster and cheaper delivery times. According to Jassy in his shareholder letter, the cost to serve, or the cost of bringing a product to a customer, decreased by more than 45 cents per unit in 2023.

Currently, Amazon has established more than 55 same-day delivery sites in the United States, which are primarily located in major metropolitan areas. The facilities are approximately 100,000 square feet, compared to Amazon warehouses, which can measure up to 26 football fields, and they store a smaller selection of top-selling products.

As a result of same-day delivery, Amazon’s fulfillment process is also condensed, typically spread across several facilities under one roof. As a result, fewer stops are made on the way to a shopper’s door, which reduces the cost of each shipment.

With Walmart and Target increasing their delivery efforts, Amazon has stepped up its investment in fast shipping. According to Walmart, items can be delivered within 30 minutes, while Target launched a loyalty program in March offering same-day delivery in as few as one hour for orders exceeding $35.

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