Increase sales due to Amazon’s new one-day shipping initiative

Amazon’s plan to offer single or one-day delivery for all Prime members worldwide is costing more than expected. It is observed that there is an increase in the Prime membership adoption rate. And customers are spending more on prime one-day services offering. Amazon.com, Inc., is a multinational company which is based in Seattle, Washington US. RBC Capital Markets said on Tuesday, i.e. on 3rd September 2019, Amazon Inc. registered an additional US$ 24 Billion total revenues. The company raised its yearly stock price from US$ 2,250 to US$ 2,600. This accounted for nearly 50 % from Amazon’s closing price of US$ 1,789 on Tuesday.

In early 2019, Amazon Inc. announced a plans a shift its free two-day shipping program for Prime members to one-day shipping. This will speed up delivery and add enhance company’s customers base. It is currently running it’ s one-day shipping program in countries of North America. And the further it is planning to expand it internationally. The company announced that on June 2019, it rolled out free one-day shipping for Prime Members This is for more than 10 million products, with no minimum purchase amount.

The company expects that adopting this strategy will add more value to its US$ 119 per year Prime memberships. The increase in the amount of purchases customers makes on Amazon versus elsewhere which including physical retailers around the globe. The company has forecasted a US$ 800 million expense for the second quarter for one-day shipping program. The company have and is planning to invest huge amount for speeding up the delivery process. During Q2 2019, the company has spent nearly US$ 8.1 billion on shipping of products, which accounted for 36 percent. Whereas in 2018, the company had spent over US$ 27.7 billion on shipping. Which was an increase of US$6 billion or up by 28 percent over the prior year.

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