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A closer look at Amazon's delivery network illustrates why the company is now ready to make one-day shipping the default for its Prime members.
Amazon is already capable of offering same-day and next-day delivery to 72% of the total U.S. population, including almost all of the households (95% or more) in 17 of the wealthiest and most populated states and Washington, D.C., according to a report published in March by RBC Capital Markets.
The vast delivery network is the result of significant investments over the past four years, a period during which Amazon built out fulfillment centers across the country, nearly tripling its U.S. logistics infrastructure, RBC said. Amazon has added roughly double the amount of distribution space Home Depot currently owns.
That means the company has a huge head start in fulfilling its plan laid out in its latest earnings report to shorten the current two-day free shipping plan by one day for Prime members, who pay $119 a year for fast delivery as well as services like unlimited music, access to the video catalog and exclusive deals.
"We see Amazon's 1-day Prime shipping raising consumer expectations and increasing the cost to compete in e-commerce," Morgan Stanley analysts wrote in a note after the announcement.
www.cnbc.com
Amazon is already capable of offering same-day and next-day delivery to 72% of the total U.S. population, including almost all of the households (95% or more) in 17 of the wealthiest and most populated states and Washington, D.C., according to a report published in March by RBC Capital Markets.
The vast delivery network is the result of significant investments over the past four years, a period during which Amazon built out fulfillment centers across the country, nearly tripling its U.S. logistics infrastructure, RBC said. Amazon has added roughly double the amount of distribution space Home Depot currently owns.
That means the company has a huge head start in fulfilling its plan laid out in its latest earnings report to shorten the current two-day free shipping plan by one day for Prime members, who pay $119 a year for fast delivery as well as services like unlimited music, access to the video catalog and exclusive deals.
"We see Amazon's 1-day Prime shipping raising consumer expectations and increasing the cost to compete in e-commerce," Morgan Stanley analysts wrote in a note after the announcement.
Amazon can already ship to 72% of US population within a day, this map shows
As Amazon starts to roll out one-day shipping to its most loyal customers, it already has a logistics network spanning much of the U.S.
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