Amazon's shipping costs were up 36% YoY in Q2 2019 – contributing to the end of the e-commerce giant's four straight quarters of record profits:
costs were up 36% year-over-year in Q2 2019 to exceed $8 billion. This follows three straight quarters where YoY growth in shipping costs didn't exceed 23%.The high shipping costs contributed to the end of the e-commerce giant's four straight quarters of records profits,The Wall Street Journal. Amazon's net income of $2.6 billion was the lowest since the second quarter of last year.
In order to accomplish this goal, Amazon knows it will have to make substantial investments to build out its logistics network and capabilities. In April, Amazon said it would be$800 million in Q2 2019 to give Prime members access to one-day free shipping, down from what has traditionally been a two-day offering.
Although Amazon is sacrificing profits in the short term, in the long term, its logistics buildout will enable it to cut costs while driving more revenue. As Amazon puts more items on its one-day shipping list, consumers may find themselves making purchases more frequently due to added convenience — a trend that would drive up revenue.
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