Enjoying that Prime membership comes at a big cost to Amazon
Generally speaking, being the world’s largest online retailer is a good thing. Amazon’s ubiquity can tell you that.
Staying that big, though, can carry an equally massive cost. This chart from Statista shows it pretty well: Amazon’s net shipping costs have grown from $317 million a decade ago to more than $4.5 billion over the first three quarters of this year — before the holiday shopping season has even started.
Now, given how much Amazon’s profile has grown over that time, some rise is expected. A big chunk of that cost, though, is due to the service that’s made it so much money in the first place: Amazon Prime. Being a Prime member means getting your stuff faster, and at no extra cost. Naturally, fulfilling those promises costs Amazon a pretty penny. So as more and more people have become active Prime members, that cost has skyrocketed.
Amazon is well aware of how necessary it is to contain this as much as it can, and has started investing more in its own shipping network to help. It’s got trucks, planes, and drones to try lightening the load as well. Fresh off a shakier-than-usual ;quarter, however, analysts are now looking closer at how the company will manage the logistical nightmare it’s bound to.
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