Companies and Brands
Amazon Will Charge More Money for Shipping
Published:
Last Updated:
UPDATE: Amazon responds: The first sentence of your story is just flat inaccurate. Nowhere in the WSJ story does it say that we are charging more for Prime Delivery. The “fast-shipping service” for small orders has been in place since same day shipping started a few years ago.
Amazon will charge customers more for shipping. This will primarily affect people who get same-day service. Amazon, desperate for revenue, has been losing money on the system, which could get customers their orders in hours.
According to The Wall Street Journal, Amazon’s traditional costs run $1.75 for the “last mile” of delivery, while same-day service costs for the same distance costs the e-commerce company $3.30 per package. Amazon keeps fulfillment centers near big cities to make the service available. Amazon management said, “We’re always exploring ways to bring our customers new levels of convenience and delivery options that work best for them. Same-Day Delivery is one of the latest innovations.”
Amazon’s pricing riddle is whether to charge extra for the service or use it as a means to keep subscribers of its $139 a year Prime service, which has free delivery costs for some packages and Amazon Prime Video. The service brings in billions of dollars, and some research shows that Prime members spend more money shopping at Amazon than people who do not subscribe.
Amazon is on the ropes financially. In its most recent quarter, its North American e-commerce segment lost $240 million on $93.3 million. This is partly due to the cost of Amazon’s massive warehouse delivery system. The number of delivery points was cut after increasing during the pandemic. Amazon has fired thousands of workers to bring these costs down.
Amazon is trapped by one of its inventions. Rivals like Walmart offer similar delivery systems. Amazon cannot pull back too much without affecting consumer loyalty and recurring revenue.
Amazon’s investors have also taken a beating, with the stock falling as much as 50%. This has put pressure on Andrew Jassy, Amazon’s relatively new CEO. He has to decide how much to charge for same-day delivery or potentially risk customer loyalty.
Here are 17 terrible investments by Amazon.
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.