Amazon to Spend at Least $800 Million to Move to One-Day Prime Shipping

Brian Olsavsky, CFO of Amazon, said during Amazon’s recent quarterly earnings call that the company intends to take all of the company’s standard Prime Two-day Shipping, to one day:

“We’re currently working on evolving our Prime free Two-Day Shipping program to be a free One-Day Shipping program. We’re able to do this, because we spent 20 plus years expanding our fulfillment and logistics network, but this is still a big investment and a lot of work to do ahead of us.

For Q2 guidance, we’ve included approximately $800 million of incremental spend related to this investment. And just to clarify, to give a little more information, we have been offering, obviously, faster than Two-Day Shipping for Prime members for years, one day, same day, even down to one to two hour delivery for Prime Now. So we’re going to continue to offer same day and Prime Now selection in an accelerated basis.

But this is all about the core free Two-Day offer morphing into – or evolving into a free One-Day offer. We’ve already started down this path. We’ve in the past months significantly expanded our one-day eligible selection and also expanded the number of zip codes eligible for one-day shipping.

So we’re taking a significant step. It wasn’t showing up in Q1. It was minimal in Q1’s results. It’s a significant step and it will take us time to achieve. And we want to ensure that we have good delivery experience for our customers as we evolve this offer.”