Logistics, ICT, Executive - Amazon Commits To Free Delivery
Despite a steep decline in third-quarter profits, online retail giant Amazon is committing to invest heavily in one-day shipping.
The company revealed that operating income decreased to $3.2 Billion in the third quarter of 2019, down a half billion dollars from $3.7 Billion in the third quarter of 2018. Net income decreased to $2.1 Billion in this year's third quarter, down from $2.9 Billion in the same time in 2018 - that comes out to $4.23 per diluted share from $5.75 per diluted share.
This actually knocked founder Jeff Bezos out of the position of world's richest man, with an estimated net worth of US$103.9 Billion. He now takes second place to Bill Gates, who regained the position with his personal fortune of $105.7 Billion.
And yet, Bezos doesn't seem too concerned. He is pressing ahead with Amazon's commitment to make one-day shipping the new normal for members of Amazon Prime, rather than the two-day shipping that it has long offered. That meant an investment of $800 million in the second quarter alone to make this reality - and he's hinted at more spending coming up.
“We are ramping up to make our 25th holiday season the best ever for Prime customers - with millions of products available for free one-day delivery," Bezos said. "Customers love the transition of Prime from two days to one day - they've already ordered billions of items with free one-day delivery this year.
"It's a big investment, and it's the right long-term decision for customers," he continued. "And although it's counter-intuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer - it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday."