Amazon's Plan: Shipping Before Clicking

It’s called “anticipatory shipping,” and according to Amazon's AMZN recent patent application would provide the company a means to move products closer to you so you would get them quicker when you do eventually place an order.

The trick has to do with knowing which products to move to nearby shipping hubs or even onto delivery trucks – and when.

Based on the patent, Amazon would consider such things as previous orders, search history, wish lists, items placed in online shopping-carts – whether ordered or not - returned merchandise and even the length of time your cursor hovered over an item on the screen.

In other words, if you were contemplating buying an item, Amazon would pack it up and send it closer to you so it would be ready for delivery the instant you clicked “buy.”

Amazon said it believed any delay between placing an online order and receiving merchandise “may dissuade customers from buying items from online merchants.” Ultimately, this could lead potential customers to go to a bricks and mortar store to pick up whatever item they were considering buying online.

Related: Amazon Reports Record Holiday Numbers

It’s all about reducing delivery times. The current system calls for Amazon to receive an order, find the item in a warehouse, and then send it to the customer. “Anticipatory shipping” simply puts the item in a warehouse, shipping hub or delivery truck closer to the customer, while Amazon waits for the order to come.

As part of its plan, Amazon said it might even suggest an item to a customer after Amazon had already determined the customer might want that merchandise – as a way to cut down on mistakes caused by shipping products close to customers who end up not buying them.

According to information in the patent application, Amazon said if its algorithms broke down and it ended up delivering the wrong item to a customer, it might simply convert the item to a promotional gift as a show of good will.

Forrester Research analyst, Sucharita Mulpuru told The Wall Street Journal, "It appears Amazon is taking advantage of their copious data. Based on all the things they know about their customers they could predict demand based on a variety of factors."

The system would help Amazon overcome one big advantage bricks and mortar stores have over the shipping giant – immediate availability of products. By carefully moving the right merchandise nearer to the end buyer, the company could all but eliminate any delay between the decision to purchase and the arrival of the product.

At the time of this writing, Jim Probasco had no position in any mentioned securities.