Amazon’s net shipping costs reached an all-time high of over $5 billion for the full year of 2015. This was revealed in Amazon’s annual 10-K filing with the Securities & Exchange Commission.
The 51 percent increase in Prime memberships in 2015 is seen as the main reason for this. The company’s membership program which offers free two-day shipping to customers, it has boosted Amazon’s overall sales but also increased its net shipping costs.
Now Amazon moves to lower down their shipping expenses by purchasing thousands of truck trailers to ferry goods between its warehouses and distribution centers. The company has also experimented in other forms of delivery method like bicycle couriers, Prime Air drones, air freight, Prime Now delivery, and even an Uber-like crowdsourced package delivery system, called Amazon Flex.
Amazon CFO Brian Olsavsky said on a call with analysts that Amazon’s trucks, drones, and other investments in its own transport and delivery systems are meant to supplement, not replace, existing shipping partners, Although some analyst sees that this might not be the case forever given that Amazon has been largely investing in their shipping and delivery. More info on this news please visit http://www.geekwire.com/2016/amazons-net-shipping-costs-top-5b-for-first-time-fueling-push-to-build-out-its-own-delivery-network/