Amazon is the world’s biggest online retailer. Staying at the top comes with a lot of challenges – the largest probably being the logistical nightmare of shipping millions of orders to people around the globe on a daily basis. The chart below illustrates just how enormous the effort required to get all those packages to customers in time really has become as the company has continue to grow.
In 2006, the company spent a total of $884 million on outbound shipping and the logistics involved while taking in $567 million from customers in the form of shipping charges and Prime membership fees. That left the company with net-shipping costs of $317 million or 3 percent of its revenues.
You will find more statistics at Statista
In 2016 so far, Amazon’s net shipping costs amounted to $4.56 billion, roughly 5 percent of its revenue, and that doesn’t even include the holiday quarter, traditionally the most challenging in terms of logistics.
Containing the negative effect of shipping costs on the company’s bottom line is one of the key challenges that Amazon will have to master going forward, which is why it is no surprise that the company invests heavily in logistics infrastructure and research.
At Amazon’s earnings call last week, CFO Brian Olsavsky said that the company had opened 18 new fulfilment centers during the quarter, three times the normal rate.
Interested in increasing your sales and profits with Amazon repricing software?
Get your free 15-day trial today and watch your Q4 sales soar!
[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][xyz-ihs snippet=”Join-Newsletter-Blog-Footer”][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]
