Amazon sacrifices profits for faster shipping
Amazon has offered two-day shipping to Prime members for nearly a decade now.
But this year, the company’s expected to spend around $3.5 billion to expand same-day shipping, according to Youssef Squali, lead internet analyst at SunTrust Robinson Humphrey.
It’s spent nearly half that amount already — so much that its third-quarter profits were down 27% from the same time a year ago.
Why the emphasis on shipping? Because Amazon’s defining offer of 2-day shipping isn’t so defining anymore. Walmart, Target and drugstores have caught up. So Amazon is upping the ante, moving to same-day shipping.
It’s an expensive move that it hopes its competitors won’t be able to match.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
