How Amazon delivers prime orders in just one day?

"There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be second."- Jeff Bezos

Amazon invested about 800 million in 2019 to increase its infrastructure, where most of the money went into logistics and transportation. To cut down the cost amazon is gradually pulling off its dependence on UPS (its logistics partner) and taking charge of its transportation business. Amazon recently breaks ground of 1.5 billion$ air hub in Northern Kentucky in May. This move was to move their prime delivery from 2 days to 1 day.

The prime delivery reaches at your doorstep in 4 steps-

1. Before you order- The journey a package takes to reach your door starts even before you place the order. Most items on amazon are directly shipped to you by a third party. Amazon charges them a listing fee of 15%  of their product’s selling price.  While there are some amazon original products such as amazon basics, amazon essentials, and Alexa devices. They even buy products from a third party and keep them as inventory to ship it when they get the order.

2. Fulfillment center-

1. Long-distance delivery – after getting out of the fulfillment center the items had to ship to another country in the warehouse of your region. They have partnered with some courier companies to do the same. But now they have built their own airline network so that they can cut costs and fasten the delivery process.

2. Last-mile delivery- after the item arises in another warehouse near your city, the real challenge appears as the package needs to be hand-delivered at the doorstep with many other packages at different places. This consumes a lot of time. So to solve this, amazon partnered with small businesses to reduce their last-mile delivery cost. It also launched Amazon Flex to solve this problem, which actually reduced their cost drastically. They are even testing drone delivery which can be a revolution in last-mile transportation delivery.

Amazon bought the robotics company KIVA in 2012  for 775 million to make its fulfillment center more efficient. They have driving robots to move the items around, Robotic arms to lift boxes and pallets, and even robots who can pack the boxes.

Amazon is also trying to move one step forward in delivering the best value to the customers. They filed a patent called “anticipatory shipping model” in 2012 which states that Amazon will deliver the

desired item of the customer at his doorstep even before they order it. It is like sitting under a wishing tree, imagining what you want, and guess what that item is in front of you. All this could only happen because of the tons of data they have and with the help it predicting what the customer wants to buy.

Amazon also has patents out for giant flying warehouses and drones that can react to flailing hands and screaming voices.

By such innovation speed, you can predict how the delivery scenario might look after 10 years.