Amazon vows to make 1-day shipping standard for Prime members

Amazon's profit surges on cloud computing, advertising gains

Amazon already offers one-day Prime shipping on select orders, but two-day shipping is still the default. Chief Financial Officer Brian Olsavsky made the announcement Thursday during Amazon's first quarter earnings call, as $3.6 billion in profit on almost $60 billion in sales was revealed.

Amazon says it will start to offer one-day shipping to its U.S. Prime members. "We do expect this growth rate to be higher for all of 2019, so most of that will happen in the next three quarters".

While Olsavsky did not provide a concrete timeline for the program's rollout, he said, "We expect to make steady progress quickly and through the year". But the company will continue to face more challenges as it grows larger.

While the United States is Amazon's biggest Prime market, the company has already sped up deliveries beyond two-day in other countries.

"It's hard to see how a new challenger can wrestle business away from the likes of Amazon, Google, and the latest member of the $1tn club, Microsoft". These increases come off the back of a 17 per cent growth in sales to US$59.7 billion ($85.09 billion).

In the same time a year ago, it reported net income of $1.63 billion, or $3.27 per share.

Amazon's operating expenses rose 12.6 per cent in the quarter to US$55.28 billion as it invested in electric-car maker Rivian and self-driving auto startup Aurora and continued spending on its Prime program, grocery delivery from Whole Foods stores and original video content.

In response to our inquiry about closures of some fulfillment centers, an Amazon spokesperson provided no details.

Amazon's "advertising flywheel now appears to be in full effect and will only be a bigger part of the growth story", Andrew Lipsman, an analyst for eMarketer, said in an email.

"Amazon delivered slower growth in all key segments - AWS, advertising and e-commerce - but margins skyrocketed, seemingly driven by less aggressive investment", said Atlantic Equities analyst James Cordwell.

As the company has grown, it has become a clearinghouse for smaller businesses.

He said Amazon is already spending heavily to update its infrastructure to make the change, including $800 million in investments in the current quarter, starting in North America.

The company's loyal customer base has drawn merchants to sell and increasingly advertise through its site in exchange for fees. Analysts had expected earnings per share of $4.72.



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