Smash Notes
Amazon's new Prime number
Amazon's shift to one-day shipping as the core benefit of its Prime membership program promises to significantly alter Amazon’s financial picture and accelerate the pace of global online commerce. On this special episode of the GeekWire Podcast, reporter Nat Levy joins us to look at the implications of this move for Amazon, its customers, competitors…
Notes
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Amazon is planning to transition their 2-day Prime shipping to a 1-day shipping program and is spending a significant amount of money on this investment.
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Amazon Prime is now 14 years old. Free 2-days shipping has been their advantage for most of this time, but many retailers are catching up. Target and Walmart now have a version of two day shipping, as well as a network of stores which could be turned into local fulfillment centers. Amazon needs to set a new standard, and one-day shipping seems to be it.
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About $7.3 billion in a single quarter, before an even larger bill. On GeekWire, reporter Nat Levy tells Todd Bishop that in the first quarter of 2019 Amazon spent roughly $7.3 billion on shipping alone. Amazon's finance chief had just said Prime's free two-day shipping would become free one-day shipping, and guidance included about $800 million of extra spending for that change in the next quarter. Levy says $800 million was more than 10 percent of the prior quarter's shipping cost. He also notes Amazon Web Services produced $2.2 billion of operating income that quarter, about half the company's earnings.
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No. It is a spoof played for a laugh. On GeekWire's episode about Prime moving to one-day shipping, Todd Bishop and Nat Levy run a 2012 YouTube bit from the Builder Burgers channel. The fake ad says you check out, choose yesterday shipping, and you have already had the product for a day. A box you did not order shows up the day before, and Amazon support tells you that you bought those shoes tomorrow. Bishop stops the clip and says it is the only thing in the episode that is not real. The actual story is the cost of taking Prime from two days to one.