Amazon Commits Resources For Same-Day Delivery Boost To Drive Bottomline Growth

Amazon.Com, Inc AMZN earmarked resources to facilities and services structured to deliver customer packages in less than a day.
Amazon’s expansion of ultrafast delivery options reflected competition for fast-delivery opportunities from Walmart Inc WMT and CEO Andy Jassy’s renewed focus on profits, the Wall Street Journal reports.
Amazon’s ultrafast delivery is possible with a strategy is its network of warehouses called same-day sites. The facilities are a fraction of the size of Amazon’s large fulfillment warehouses, the WSJ writes.
The larger Amazon warehouses rely on delivery stations closer to customers for the final shipping stage.
Amazon has opened about 45 of the smaller sites since 2019 and could expand to at least 150 centers in the next several years, according to the WSJ.
The sites have primarily opened near large cities and deliver Amazon’s catalog’s most popular 100,000 items.
New locations recently opened in Los Angeles, San Francisco, and Phoenix, according to Amazon.
Analysts say Amazon’s service can help the company retain users of its $139-a-year Amazon Prime subscription, which provides streaming, discounts at Whole Foods Market, and other perks.
Amazon’s fast-shipping service can add fees for small orders. “Last mile” costs to deliver items from the locations can cost $3.30 a package, compared with $1.75 for packages at its traditional fulfillment sites, according to MWPVL.
Using same-day sites can eliminate other costs that apply to the company’s standard fulfillment system.
“They need volume to make it work,” said Marc Wulfraat, president of MWPVL.
Amazon reported fourth-quarter net sales of $149.2 billion, up 9% year-over-year. The total came in ahead of a Street estimate of $145.45 billion.
The company reported fourth-quarter earnings per share of 3 cents, which came in shy of a Street estimate of 17 cents.
Price Action: AMZN shares traded higher by 0.73% at $94.18 premarket on the last check Monday.

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