One-Day Shipping Is Already Having a Big Impact on Amazon
Back in April, Amazon (NASDAQ: AMZN) CFO Brian Olsavsky announced the company's plans to shift its Prime shipping program from two-day shipping to one-day shipping. By the start of June, Amazon could ensure one-day delivery on 10 million items nationwide. At the time, Olsavsky warned the company was investing an additional $800 million in its logistics operations to keep inventory stocked closer to shopper's homes.
Late last week, Amazon's efforts showed up in a big way on the company's second-quarter earnings release. The costs added up and resulted in lower-than-expected profits. And those costs will keep climbing next quarter, negatively affecting Olsavsky's outlook for third-quarter operating income. On the bright side, North America retail revenue growth accelerated, something Olsavsky attributed in large part to the transition to one-day shipping.
The impact on Amazon's business is just starting to be seen, but it's going to remain noticeable in Amazon's results over the next year. Long term, the move should produce a positive impact if Amazon's early results are anything to go by.
Quelle Fool.com
