Two hour shipping with Amazon Prime Now

[HTSS_TR]

For some cities Amazon offers free 2-hour shipping on thousands of items with Prime Now. How do they do that without loosing money ?

If someone with Prime Now orders just one or two items in the list, and Amazon has to go in a van to deliver it they will loose money for sure.

Unless they can put together many orders together, but they may not be able to do all deliveries within 2 hours.

One day delivery in some cities is possible for many items(with warehouse nearby), but 2-hour seems difficult if not impossible.

 

[DerbyDave]

Does it still take 5 days to leave the warehouse if you are not a Prime member?

 

[DSparks]

We have one of those huge amazon warehouses about 3 miles from us...gf has been using the prime now for a month or so now...works awesome even for cold stuff....who cares if they make $$ or not..if they are willing to do it thats on them....

 

[DoubleWasp]

In a city with enough population density, it absolutely can make sense.

My guess is, most of those trucks or vans will always have a load close to full.

Makes more sense than grocery or pizza delivery in 45 minutes.

 

[Andrew1972]

Think über except packages instead of people. Very possible

They can put plenty of delivery together because well written code / platform is doing it already.

Software controls robots in a warehouse floor to retrieve items for a packer automatically to fill an order. I see little reason it cannot call vehicles into play.

 

[Andy636]

Originally Posted By: HTSS_TR
For some cities Amazon offers free 2-hour shipping on thousands of items with Prime Now. How do they do that without loosing money ?




Slave labor probably ?

 

[HTSS_TR]

Originally Posted By: DSparks
We have one of those huge amazon warehouses about 3 miles from us...gf has been using the prime now for a month or so now...works awesome even for cold stuff....who cares if they make $$ or not..if they are willing to do it thats on them....

If they lost money with this service they will raise annual fee just like they raised fee on Prime membership from $49 to $99.

They may loose some money for a while to get more sign up for Prime Now, when there are enough members they will raise the fee.


Originally Posted By: DoubleWasp
In a city with enough population density, it absolutely can make sense.

My guess is, most of those trucks or vans will always have a load close to full.

Makes more sense than grocery or pizza delivery in 45 minutes.

Looking at timing details you will see the logistic problem(or difficulty): From the first order online to the last order loaded on a van must be within certain time frame such as 1 hour, all orders in a particular van must be within certain area that can be delivered within 1 hour driving distance, and they must have a very good GPS map and schedule to go to all destinations within that time frame(1 hour) regardless of traffic condition.

 

[DoubleWasp]

Originally Posted By: HTSS_TR

Looking at timing details you will see the logistic problem(or difficulty): From the first order online to the last order loaded on a van must be within certain time frame such as 1 hour, all orders in a particular van must be within certain area that can be delivered within 1 hour driving distance, and they must have a very good GPS map and schedule to go to all destinations within that time frame(1 hour) regardless of traffic condition.



It's not much nastier than my produce delivery business, and probably better than a courier service. And I'm working with very perishable goods, over a much greater and less concentrated area.

I wish I had their problem. Because of the constantly changing rates, orders often involve negotiation before they can even hit the truck.

It's a logistical labyrinth to be sure, but quite negotiable.

 

[RamFan]

If I'm not mistaken, Amazon has never turned a profit.

 

[dlayman]

Originally Posted By: RamFan
If I'm not mistaken, Amazon has never turned a profit.


Per Cnet:

"Even as operating expenses surged 25 percent during the quarter, revenue was even stronger. Sales reached $29.1 billion, up 28 percent, while Amazon swung to a profit of $513 million, from a loss of $57 million the year earlier. To put that figure in perspective, Amazon posted a profit of $596 million for all of 2015."

 

[RamFan]

Originally Posted By: dlayman
Originally Posted By: RamFan
If I'm not mistaken, Amazon has never turned a profit.


Per Cnet:

"Even as operating expenses surged 25 percent during the quarter, revenue was even stronger. Sales reached $29.1 billion, up 28 percent, while Amazon swung to a profit of $513 million, from a loss of $57 million the year earlier. To put that figure in perspective, Amazon posted a profit of $596 million for all of 2015."



Was not aware of this, thanks for pointing it out.

 

[Benzadmiral]

If this keeps up, one day we'll have negative delay in filling orders. The item will materialize on your transporter pad before you click the "Buy" button.

 

[PandaBear]

That's very doable if you have a lot of PrimeNow inventory at the exit of the shipping dock for the next van out, in a city that already has Amazon's own delivery service.

2 hours should be enough to unload a full van on an optimal route.

Amazon put all its profit back into investment for growth, retail is pretty much break even while Prime membership made some money and AWS made A LOT of money.

 

[HTSS_TR]

Originally Posted By: PandaBear
That's very doable if you have a lot of PrimeNow inventory at the exit of the shipping dock for the next van out, in a city that already has Amazon's own delivery service.

2 hours should be enough to unload a full van on an optimal route.

Amazon put all its profit back into investment for growth, retail is pretty much break even while Prime membership made some money and AWS made A LOT of money.

Some don't understand that a company reports quarterly or yearly lost doesn't mean they actually lost money selling their products.

Some companies like Amazon reinvests all profit and more to growth their business, if the amount of reinvestment is more than profit then they have a lost of that quarter or that year.

 

[oilpsi2high]

Amazon is a huge ripoff right now compared to eBay. There are still deals to be found but in my experience eBay has the better offers. Just picked up a new Canon T5 DSLR with IS lens and a bunch of accessories for $369 shipped.

 

[Nate1979]

Originally Posted By: oilpsi2high
Amazon is a huge ripoff right now compared to eBay. There are still deals to be found but in my experience eBay has the better offers. Just picked up a new Canon T5 DSLR with IS lens and a bunch of accessories for $369 shipped.


Ebay is a horrible company and I refuse to give them my money for how they cheat sellers in favor of fraudulent buyers.