Amazon to make free one-day shipping standard for Prime
- Author: Darren Santiago Apr 27, 2019,
Apr 27, 2019, 0:20
Amazon Chief Financial Officer Brian Olsavsky said during a conference call with Wall Street analysts after releasing first-quarter earnings on Thursday that it had already begun increasing availability of 1-day delivery and had "turned the dial significantly" in April.
The company hopes that cutting delivery times in half will make its $119-a-year Prime membership more worthwhile, since every other online store offers free deliveries in two days. The Internet retailer is planning to transition Prime from free two-day to free one-day shipping as its default option, the company has revealed, enabling customers to get their products the day after they order them. "We (are) again, trying to take advantage of the fulfillment capacity and transportation capacity, especially with third-party partners, that we have".
AWS revenue gained nearly 42 per cent from a year earlier to US$7.7 billion.
Since its founding 25 years ago, Amazon has grown rapidly into one of the country's largest and most influential companies. "It is clear that Amazon is now in a different era - one characterised by more modest gains".
Sales for Amazon Web Services (AWS) rose 41 percent to $7.7 billion in the first quarter. The unit's operating income was US$2.2 billion, or 50 per cent of Amazon's total.
Amazon gave second-quarter revenue guidance in the range of $59.5 billion and $63.5 billion, compared to a consensus of $60.88 billion from analysts. The upcoming faster delivery will come at no additional cost or conditions for paying Prime members, though. Revenue barely beat expectations in the first quarter, through it grew at a healthy 17 percent year-over-year clip to $59.7 billion.
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Digital software sales on Switch brought in ¥118.8 billion ($1.06 billion), an 95.4% increase year-over-year (yoy). With the 3DS seemingly nearing the end of its life span, the Switch could replace it altogether.
Sales in Amazon's "other" segment, which is mostly advertising, increased 34 percent, to 2.72 billion.
As part of its infrastructure work, Amazon in 2017 announced plans for a new $1.49 billion air cargo hub in Kentucky.
The marches into new industries has been lucrative to shareholders, including its founder Jeff Bezos, who is the richest man in the world. Offering faster shipping could encourage customers to stick with Prime.
The company is delving into even less familiar terrain, too.
The company projected operating profit of as much as US$3.6 billion, falling short of analysts' estimates and suggesting the company's may be spending more than anticipated on its bets for future growth.