Amazon to Make One-Day Shipping the Standard on Amazon Prime
Amazon plans on spending $800 million in this year's second quarter to build out the needed infrastructure.
"We're currently working on evolving our Prime free two-day shipping program to be a free one-day shipping program," Amazon's chief financial officer Brian Olsavsky said in a Thursday earnings call.
According to Olsavsky, Amazon plans on spending $800 million in this year's second quarter to build out the infrastructure needed to make the one-day delivery times possible. Already, the company's Amazon Prime program has been offering one-day, same-day, and two-hour shipping times, but only in certain zip codes and for a limited number of products.
However, in recent months the company has been expanding the number of zip codes and items eligible for the one-day shipping times, Olsavsky said. "We're able to do this because we spent 20 plus years expanding our fulfillment and logistics network. But this is still a big investment and [there's] a lot of work to do ahead of us," he added.
For now, it isn't clear when Amazon will complete the transition to the faster delivery time. But the goal is to bring the one-day shipping to Amazon Prime across the globe, starting in North America. "We expect to make steady progress quickly and through the year," Olsavsky said.
The company is making the investment a year after increasing the price for Amazon Prime from the annual $99 fee to $119. At the time, Amazon said the price hike was needed because the paid subscription service was costing the company more to run. With Amazon Prime, customers can get access to both faster free shipping, and access to the company's video and music streaming services.
Despite last year's price hike, Olsavsky said on Thursday that the company saw more Amazon Prime sign ups in 2018 than in any other year. "Morphing to a one-day free shipping offer will make it even more the best deal in retail," he added.
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