Reasons Why Amazon Offer Free Delivery
If you are considering purchasing a new product online, it is highly likely that you will use Amazon to purchase it. The company dominate the ecommerce industry and are still growing at a staggering rate. No ecommerce business in the world knows the online shopping sector better than Amazon. They were one of the first to enter the sector and that has given them a competitive edge over their competitors.
To keep at the top they are heavily investing billion into future tech such as drones that will help to keep it’s number one position for the foreseeable future. The company would not be in this position though if it was not for the success of Amazon Prime and Free Delivery.
Amazon was one of the first online retailers to offer free shipping on their products for anyone who subscribes to their Prime program. The incentive of speedy delivery at zero costs helped the company quickly build up its subscription base. It managed to corner the market and build up a loyal clientele base. Thanks to its advanced warehousing it means that a large percentage of the process is carried out by machines and automation. It has helped dramatically cut the costs of its operation which has enabled it to offer free shipping.
The cost of offering free delivery and shipping sets the company back $1billion every three months. This is a staggering figure but one that Amazon is more than willing to pay to get new subscribers for Prime. The reason for this is that the Prime members in the US bring in more than $5 billion a year which more than meets the cost of offering the incentive and provides the company with vast profits.
Amazon Prime is the most important element of the business going forward. It is why the company introduces more incentives to encourage new subscribers. By making profits from membership fees it means that they can offer products with the lowest profit margins to stay ahead of the pack. It is impossible to see anyone catching up and overtaking them to become the new king of e-commerce in the near future.
If Amazon continues to grow at their staggering pace it will not be long before they dominate more sectors. The companies have ventured into creating their own TV Shows and have big plans for the future. If any company in the world is going to revolutionize ecommerce it is going to be Amazon and in the not too distance future expert to see your products delivered by self-drive vehicles or drones.
Over the last two decades, Amazon has amassed billions of profits. It has put them in a position where they can buy out any startup competitors they see as a threat to their dominance. With the heavy investment in technology, it will lead the way in the future of the industry as others struggle to keep up. The company would not be in this position if they had not started Amazon Prime and it will continue to be the key component to letting you get your important products.