Last year E-commerce sales worldwide surpassed $1 trilion, Amazon made up 5% of those sales. The e-tail giant’s focus on speed and customer service has led it to become the most trusted retailer in the world. So what 5 thing’s should all e-com and retailers be aware of….
1. Amazon Prime ( the company’s $79 per year, second day delivery programme) last year made up a third of Amazon’s US profits. via member fees and their purchases. ‘Once you become a prime member your human nature takes over and you want to leverage that $79 a month as much as possible, buying across all categories more regularly’
2. Amazon’s 89 Global logistics centres sit as locally as possible to urban areas, and are fitted with machinery that enable it to ship a product in less than 2.5 hours. This speed of delivery and built up consumer trust, enabled Amazon to process 306 items per second during last year’s holiday season.
3. AmazonFresh a same day grocery delivery service ( available in Seattle and California) is the foundation of a broader roll-out of the holy-grail of shipping- same day delivery. Bezos developed a service that would work- not because he suddenly wanted to become a full-service grocer, but because of how often people buy food.
4. Third-party sellers now make up 40% of Amazon’s product sales. With Amazon generally taking 20% commission on each transaction, these sellers are incentivised to use Fulfilment by Amazon (FBA) rather than drop-shipping.
5. As Amazon continues to evaluate the best way to deploy the bots from their $775 million buyout of Kiva Robots last year, could their continued drive to logistics monopoly lead to their next purchase being say UPS or USPS?
Pretty soon retailers with their online business are going to be faced with a choice. You’re not going to be able to compete with Amazon so you’re going to have to consider partnering with them and leveraging their network. Read more in the latest issue of Fast Company.
