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    « The Fragrance Shop Steps Up Online, Launches Same-Day Delivery Testing | Main | Same-Day Part Delivery for Toyota Begins »
    Wednesday
    Sep072016

    Amazon Has Record 28% 2nd Quarter Growth, Same-Day Delivery Helps

    Some revenue growth happens for any company that is good, unless you are competing against Amazon. Your results are going to have to be more than mediocre in comparison to what the e-retailer is doing, putting others in a compelling position to make innovative adjusts like Same-Day Delivery to their e-commerce.

    The recent numbers show that Amazon is outpacing many retailers, as sales increased 28.1% in the second quarter this year in the US and 30.1% internationally. Amazon's Web Services cloud computing unit also went up by 58.2% increase, resulting in an overall revenue growth to 31%. More and more shoppers have become comfortable with online shopping, as well as the convenience demand that it meets. This demand is driving Amazon and other retailers to get online items into their customers' hands right where they are. Brick-and-mortar business still remains ahead e-commerce; however, online retail is expected to reach $500 billion by 2018. This equates to Amazon's aggressive ingenuity and it is creating results.

    In fact, the article by Internet Retailer mentioned the second quarter numbers were a record net income for Amazon. Its' met income reached $857 million, which is almost ten times the net income of only $92 million in the second quarter the year prior. The positive quarter makes it the fifth consecutive profitable term that Amazon has had. In the past, Amazon often reported quarterly losses due to heavy investments into new fulfillment centers, new device development, licensing movies and TV shows for its Prime Video service. Yet, there is an overturning of investment into steady revenue.

    Here are some additional stats from Amazon record-setting second quarter:

    • North American net sales of $17.674 billion, up 28.1% from $13.796 billion in the same period a year ago.
    • International net sales of $9.844 billion, an increase of 30.1% from $7.565 billion last year.
    • North America sales of books, music and other media of $2.928 billion, an increase of 11.8% over $2.620 billion in Q2 2015. North America sales of electronics and general merchandise increased 31.6% to $14.459 billion from $10.987 billion.
    • Net income of $857 million, a sharp increase from $92 million a year earlier.

    From Amazon, it appears we haven't seen nothing yet. “We're opening 18 fulfillment centers this quarter,” said Brian T. Olsavsky, Amazon's senior vice president and chief financial officer about future implementations, according to a transcript via SeekingAlpha. “To put that in perspective, we launched six in Q3 of last year. This will bring us up to 21 net FCs for the year by the end of Q3 and that compares with 10 fulfillment centers for the first three quarters of last year on a net basis." Olsavsky went on to say, “So, why are we expanding so much? If you remember back to Q4 and the capacity constraints we had in Q4, primarily due to really strong FBA growth, we talked a lot in the Q4 call about the operational cost of that in Q4. Customers well taken care of, but we had additional fulfillment costs from being so tight on capacity.”

    Amazon is a fast moving train and same-day delivery is just one of the pieces playing a part in Prime sales growth. An example is implementing a fast shipping option for online shopping. Businesses are partnering with a Same-Day Courier like A-1 Express to offer customers on-demand services and deliver items right to their front door. The New York Courier has a national footprint and the ability to implement effective same-day delivery solutions within major US cities to attract today's online market.

    Reference: 7.28.16, www.internetretailer.com, Don Davis, Amazon reports 28% North American sales growth in Q2

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