With Amazon (AMZN) Prime two-day shipping being a whopping success, Amazon now plans on a single-day shipping program, as announced by the company itself in April 2019.
This move would require heavy stocking of all the warehouses across the US. All sorts of products need to be available at the warehouse to make one-day delivery possible. The company thus is offering a discount on monthly storage fee up to 75%.
Sent Out Emails To Independent Sellers
The company sent out emails to independent sellers notifying them of the offer in so as to warehouse their popular in-demand products in increased numbers. If these sellers do grab on the offer, Amazon would be able to attract more customers and also one-day shipping would sail smoothly. Amazon’s Fulfilment is a service wherein the company stores, packs, and ships products on behalf of these retailers. These sellers bring in 58% of the total sales of Amazon.
This plan would give Amazon a competitive advantage over other e-retailers. The promotion of the warehouse would go forward in June 2019 and last till January of 2020. The sellers who would have sold at least 60 of their products each month would be granted the discount.
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Also, the inventory levels need to be maintained by the sellers. With the plan announced, other retail giants also took the leap and announced the same plan of single-day delivery. Walmart, being one such giant, announced these deliveries in Las Vegas and Phoenix.
The quicker shipment of products at their doorstep would encourage and promote the online market, which, as of now, represents only 10% of the total US retail sales. This move might bring in a surge of new customers as well, implying greater business for Amazon and other such giants. But as we wrote in our last article, single day shipping may be just the beginning for Amazon’s expansion (See: Strong Potential For Marijuana Stocks This Summer? Amazon May Be Responsible)