The e-commerce giant launched the discounting event on July 15, 2015, to commemorate its 20th anniversary and to advertise its $99 annual Prime loyalty program.
Amazon Prime packages are mostly shipped via UPS, according to Amazon's website. But in areas not served by UPS, FedEx is used as an alternative.
Amazon’s shipping losses topped $7B in 2016
The amount of money that Amazon lost on shipping - a.k.a. the net cost of landing all those brown boxes on your doorstep in record time - reached an all-time high of nearly $7.2 billion in 2016, according to GeekWire’s analysis of the e-commerce giant’s financial results.
The number reflects the difference between what Amazon charges customers for shipping and what the company spends to get those items to customers. Amazon traditionally takes a net loss on shipping, thanks in part to the flagship Amazon Prime benefit of free two-day shipping.
But with the company selling more and more items and promising faster and faster shipping - increasingly with no shipping charge for the customer - that net cost is getting bigger and bigger.
So what’s driving the increase? Amazon CEO Jeff Bezos said that more than 50 million items are now eligible for free two-day shipping, an increase of 73 percent from the previous year.
Asked about the shipping costs, Amazon CFO Brian Olsavsky also cited a 40 percent increase in items shipped from the company’s warehouses for Amazon’s own online retail business and the Fulfillment by Amazon (FBA) program for third-party sellers.
“We’re doing fulfillment for ourselves and for our partners at a much greater clip, it’s the usual impact of the additional free shipping programs, as well as the shift toward a higher Amazon Fulfilled growth rate.”
Amazon has also been building out its own infrastructure for ocean freight, air transport, semi trucks, local delivery and drones in an effort to give itself an alternative - not a replacement, execs insist - to UPS, Fedex and other third-party logistics and shipping companies.
Before buying anything on Amazon, use these 2 tools to make sure you’re getting a good deal
The urge to shop on Prime Day makes sense: Amazon sells a ton of products and makes it very easy to buy them.
Many times, its products are less expensive than they are elsewhere.
But that's not always the case. Though Amazon's shopping experience is largely straightforward, certain aspects of it can still be misleading.
As reported by Business Insider, there are tried-and-true ways to ensure you're getting a good deal: use a price tracking tool like Camelcamelcamel, and trying a user-reviews analyzer like Fakespot.
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