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Thanks in part to its fulfillment center binge, Amazon's (AMZN +1.6%) shipping ops have become...

Thanks in part to its fulfillment center binge, Amazon's (AMZN +1.6%) shipping ops have become more efficient, argues Deutsche's Ross Sandler. Fewer air shipments, a greater ability to bundle multiple items per order, and last-mile delivery optimization are all helping out. Sandler estimates the use of Amazon Prime for shipping hurts profit contribution per order by 9%, but also notes Prime subs tend to order more. (Kiva Systems)
Comments (1)
  • Ross Sandler is flatly wrong, as I have shown in my research (http://seekingalpha.co...).

     

    AMZN has spent $2.3B on building out Fulfillment centers over the past 2-yrs and over that time their gross shipping expense as a percentage of revenue has increased. The reason their net shipping shipping expense as a percentage of revenue has declined recently is that they have charged more for shipping and increased rates for 3P sellers.
    23 Mar 2013, 11:23 AM Reply Like
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