Amazon customers who have Prime membership status will soon have available to them free one-day shipping. Currently, Prime members have available to them automatic free two-day shipping but the company also offers them one-day and two-hour shipping on certain products and at an additional cost.
Chief Financial Officer, Brian Olsavsky, told CNBC News that Amazon will be making free one-day shipping the standard default for their Prime members as was reported on the company’s first quarter earnings call for this year on
Olsavsky says that the company is working on the process to evolve from the free two-day shipping plan to the new free one-day shipping plan. In order to do this, he said, the company will be spending $800 million during the second fiscal quarter changing and improving its warehouses and delivery infrastructures. This investment will definitely take a bite into Amazon’s profit margins and as a result lower-than-expected earnings futures were predicted for the second quarter period by the company.
Amazon Prime members already enjoy being able to have products shipped out to them within a day or even in some select areas within two hours but at extra cost. The offering of free one-day shipping will significantly change things in the number of product selections and the zip code areas that would be eligible for this service. At this time, Olsavsky says, there are over 100 million items available for Prime members to choose from for the default free two-day shipping program on the company’s website.
According to Olsavsky, the new free one-day program will first begin in the North
American market but it’s plans are to eventually expand the offer worldwide in all the countries where Prime membership is offered. According to the company as of 2018, it has over 100 million Prime members worldwide.
Amazon plans to implement every possible connection available to it to make this free one-day shipping service a reality which will include the continued use of the US Postal Service, and UPS. The company will also continue to use its own third-party delivery service network. Olsavsky declined to give specific information as to the exact date of the start of the free one-day shipping service for its Prime members due to the many different areas that are involved in making this happen.
Olsavsky says that Amazon is definitely taking a significant step by offering a free one-day shipping service to its Prime members.