Amazon investing $800M to build out one-day shipping for Prime Members



Shortly after Amazon’s first quarter earnings report CFO Brian Olsavsky announced the company’s intention to enhance the standard Prime free two-day shipping program to a one day standard. Amazon introduced the Prime membership program 14 years ago, with free two day shipping being the principle benefit of the program. And while over the years Amazon has added additional benefits to the program, including Prime Video, Photos, Music, other retailers have adopted two day shipping as the standard, including WalMart which does not require a paid membership. On A conference call, Olsavsky said “We’re currently working on evolving our Prime free two-day shipping program to be a free one-day shipping program, We’re able to do this because we’ve spent 20 plus years expanding our fulfillment and logistics network, but this is still a big investment and [there’s] a lot of work to do ahead of us.” Amazon has only disclosed the number of Prime Members once, but the number is estimated to be well over $100M households today, with growth slowing in recent years. Amazon is expected to continue to use The Postal Service, Fed Ex and UPS as it ramps up it’s own last mile delivery options.


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