Amazon's Shipping Investment Pays Off

Amazon's Shipping Investment Pays Off

On Cyber Monday, Amazon.com is offering a special delivery. According to the Wall Street Journal, the e-commerce company overtook UPS in US volume thanks to its aggressive push into package distribution. Prior to this, it had surpassed FedEx. Better still, there are signs that the investment is making a profit.


The steeply subsidized shipping service offered by the $1.5 trillion firm has long attracted clients. Prior to the launch of its internal logistics project in 2016, the company's customers paid for around half of the approximately $16 billion in worldwide shipping costs. The entire cost was around five times greater than it was the previous year. The amount of the load that customers took on is unknown, but net revenue has increased by fewer than four times during the same period, excluding sales from its cloud-storage business on Amazon Web Services.


But Amazon is also growing better at delivering products to customers' doorsteps at the same time. The share of income that goes into shipping has dropped over the last year. Additionally, increased turnover results in increased profit, particularly from advertising and other supplementary services. The operating profit for the North America division through September totaled $8.4 billion, nearly quadrupling the annual amount seven years ago. The division's net sales tripled between 2016 and the initial nine months of this year. Furthermore, it is before the typically profitable holiday period, which should provide Amazon stockholders with some more positive news.

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