Amazon Shows That Shipping is Key to E-Commerce Success

How big is Amazon, you ask? According to market valuations, it is the third largest company in the world, behind Apple and Microsoft. At $916,100,000,000 (that’s $916.1 billion) it is within 10% of a trillion dollar valuation. While the company has diversified its business base to include the likes of Amazon Web Services, the Alexa virtual assistant, and Amazon Prime Video, e-commerce still accounts for over 50% of the company’s gross merchandise volume. If you are at all involved in e-commerce, what Amazon does is of great importance to you because as the elephant in the e-commerce space, when Amazon makes a move, you know it. So when Amazon says that shipping is the key to e-commerce success, it probably is. 

2 Shipping Changes at Amazon Worth Noting

The importance of free shipping to e-commerce customers has been well-known for some time. But two recent changes are setting up customers’ expectations in ways that every e-commerce retailer needs to know.

1. Free Shipping on Almost Everything – You might not have noticed it, but Amazon Prime customers now get free shipping on just about all of their products. Amazon shoppers are familiar with the “Add-On” item stats on products to qualify for free shipping. Basically, you could get free shipping on any product as long as it was added onto an order of over $25.00. In recent months, the number of “add on” products has been dropping steadily and significantly. 
2. Amazon is Now Its Own Largest Shipper – With last summer’s high-profile departure of FedEx from Amazon’s stable of shipping partners, Amazon now handles more of its own shipping (48%) than any of its partners. It has more control over its own shipping.

What Does It All Mean: As mentioned, Amazon sets the pace for what e-commerce shoppers expect. If you manage your own e-commerce shipping, you need more options, like local warehousing services, dedicated delivery, and reverse logistics, to meet your customers’ expectations because shipping is key to e-commerce success. 

To learn more about optimizing your shipping and deliveries, check out our article “3 Transportation Optimization Tactics”.