Amazon which is a shopping giant has ramped up the free one-day program from shipping for the members of Prime as it heads into the company’s 25th season of holidays. However this has comes at a big cost.
In order for the company to cut the delivery time for most of the Prime users, the company is adding more workers in the warehouses and increasing the network of shipping with more jets, trucks and facilities which sort packaging.
These efforts have cost about $1.5 billion to the company which is close to double of what had been said by the company about what the costs are going to be. However Amazon has said that the number of customers it attracts and get their shoppers to spend higher amount of money.
The move has intensified the retail wars for shipping with the largest retailer of the nation, Walmart who had announced in the month of May that it will be giving free one day delivery on the items which were more popularly.
Amazon has said about the customers that they loved the transition of delivery from two days to single day. Their CEO has said in the statement that they have already ordered loads of items with free delivery in one day during the year. It has a huge investment and in the long-term it is the right decision for their customers.
This has come after the retailer has said that net income in the third quarter has fallen to $2.1 billion by 26% from $2.9 billion which it was one year ago.
The earnings have missed the expectations of Wall Street which caused their stock to slide on Thursday.
