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Amazon’s Rising Shipping Costs Eat Into Profits

It turns out that one-day shipping is an expensive endeavor. Amazon reported worse-than-expected profits in its latest quarter, thanks in part to an aggressive effort to slash delivery times down to one day for items ordered on its site.

The e-commerce giant said on Thursday that profits during its second quarter rose 3.6% to $2.6 billion from the same period a year ago. That equates to $5.22 per share, which fell far short of the $5.57 per share that Wall Street analysts had anticipated.

Amazon’s shipping costs surged by 36% to over $8 billion in the last quarter. That is a sharp uptick when compared with the previous three quarters, when shipping costs had risen by around 20%. Amazon has stepped up its investment in its shipping capabilities after promising in April that it would make one-day shipping the new normal for members of Amazon Prime, rather than the two-day shipping that it has long offered.

The company said that it is making progress on the initiative and that free one-day shipping is now available to Prime members on more than 10 million items. “Customers are responding to Prime’s move to one-day delivery—we’ve received a lot of positive feedback and seen accelerating sales growth,” said Amazon founder and CEO Jeff Bezos in a statement.

Bezos has made an Amazon Prime membership, which carries a price tag of $119 a year, a staple in over 100 million households across the country. A big part of the draw is free shipping on millions of items. Amazon has sought to stay ahead of the curve here as retailers like Walmart and Target pile on with free shipping offers of their own, which typically require a minimum order size but don’t charge an annual fee.

It’s also a play to satisfy its most impatient customers. Amazon noted on a call with analysts and investors on Thursday that it hopes one-day shipping will cut down on the number of customers who end up leaving Amazon and buying an item elsewhere because it isn’t available for delivery fast enough.

Amazon also saw a rise in marketing costs during the quarter, as well as an uptick in compensation costs as it continues to grow its workforce. Overall costs rose 21% in the quarter.

Sales increased 20% to $63.4 billion, topping analyst estimates of $62.5 billion. However, investors seemed to focus on the disappointing bottom line. Shares of Amazon slid 2% in after-hours trading on Thursday.

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I am a staff writer at Forbes covering retail. I’m particularly interested in entrepreneurs who are finding success in a tough and changing landscape. I have been at Forbes since 2013, first on the markets and investing team and most recently on the billionaires team. In the course of my reporting, I have interviewed the father of Indian gambling, the first female billionaire to enter the space race and the immigrant founder of one of the nation’s most secretive financial upstarts. My work has also appeared in Money Magazine and CNNMoney.com. Tips or story ideas? Email me at ldebter@forbes.com.

 

Source: Amazon’s Rising Shipping Costs Eat Into Profits

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Jeff Bezos Unveils Blue Origin’s Lunar Lander; Announces Launch Of Next-Gen Rocket In 2021

Amazon founder Jeff Bezos confirmed that his space company, Blue Origin, will launch its next-generation rocket, New Glenn, for the first time in 2021, and also hinted that his company might be capable of helping NASA put humans on the Moon within the Trump administration’s stated five-year time frame.

“We can help meet that time line,” he said. “But only because we started three years ago. It’s time to go back to the Moon—this time to stay.”

Leading up to this dramatic announcement on Thursday at the Washington Convention Center, Bezos couched his vision for his space company in the context of the problems of the world as he sees them. Within the next couple of hundred years, Earth will run out of resources necessary for people to live comfortably, Bezos predicted. Which is why, he says, humanity needs to move into space.

To that end, Bezos revealed Blue Origin’s next-generation rocket, New Glenn, which will begin operations in 2021. New Glenn would be a “heavy lift” rocket, competitive with SpaceX’s Falcon Heavy rocket, as well as United Launch Alliance’s Delta IV and in-development Vulcan rocket. According to Bezos, New Glenn will reduce costs by having a first stage that can be reused 25 times and use liquid natural gas as a propellant. Though he did not reveal any pricing information about the rocket, he did mention that the fuel costs per launch would be less than $1 million.

And one of the things that rocket may launch? One of the answers came immediately as Bezos—to great fanfare—showed off a large mock-up of the company’s proposed Blue Moon lunar lander. According to Bezos, the lander will use liquid hydrogen as fuel—just as the company’s New Shepard rocket does today. It will be capable of landing autonomously and be equipped with cameras, lidar and other sensors to map terrain. It will also be configurable in order to handle a variety of missions such as carrying a rover—or humans—to the surface.

Again, there wasn’t any information provided about how much it will cost for a company to buy a mission on the Blue Moon. However, Bezos did reveal that Blue Origin already has customers.

“We already have a bunch of customers for Blue Moon, some of whom are in the audience,” he said. “They’re going to be deploying science missions to the Moon as well.”

Bezos couched these product announcements in the context of his vision for the future, which for him means humanity migrating out to O’Neill habitats–gigantic, miles-long space stations envisioned by physicist Gerard O’Neill in the 1970s, are where humans will live and work comfortably, and conduct heavy industry, Bezos said.  This will leave Earth “zoned for residential and light industry,” he said.

Building grandiose habitats—or even more relatively modest goals like any kind of permanent settlement in space or on the Moon—is not the job of this generation, but the next, according to Bezos. He sees his goal as building the infrastructure necessary for it to happen. “It’s this generation’s job to build that road to space so future generations can release their creativity,” he said.

The company also released a promo video for its lander, which you can view below.

Read more: Jeff Bezos And Elon Musk Want To Go To The Moon—They Just Disagree On How To Get There

Follow me on Twitter or Facebook. Read my Forbes blog here.

I’m an Associate Editor covering science and cutting edge tech.

Source: Jeff Bezos Unveils Blue Origin’s Lunar Lander; Announces Launch Of Next-Gen Rocket In 2021

AA Juicing Riches – Done-For-You Amazon Affiliate Niche Content Packs

1

Azon Affiliate Juicing Riches is the Amazon PLR Niche content pack allowing you to target 3 hugely popular, Evergreen sub-niches in the massive Weight Loss niche. This software comes with all of essential date that Amazon affiliates need to create great looking to generate cash.

Mike Mckay is famous for many product launches such as Amazon Affiliate Luxury Running Gear, Offline Graphics Mega Pack, WP Directory Pro, and WP Central Hub, etc. Yes, he is an expert in affiliate marketing as well as a software producer.

You will learn many things and tactics from his product. With this launch, he has spent much time and energy to develop it. It will be a good choice for marketers who want to run marketing in Weight Loss niche from Amazon. Here is how it works:

– Step 1: Download Content Pack
– Step 2: Upload Content to site
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AA Juicing Riches (FE)’s Features:

  • Introductory PDF
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  • Amazing Exact Match Domain Data – Juicing (100’s of EMD’s to select from)
  • 40 High Quality Juicing Product Review Videos (These videos are niche relevant and contain NEW Royalty Free images + music + Thumbnail image!)
  • 15x Pinterest Posts (Beautiful niche relevant images each containing an inspirational post)
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  • 60x Juicing PLR Articles  (These are niche relevant and Perfect for blog posts)
  • 6x Professional Banner Graphics  (6 Juicing Nutrition Banners + PSD’s!)
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https://i0.wp.com/www.useenit.com/wp-content/uploads/2017/12/AA-Juicing-Riches-PLR-Review.jpg?resize=740%2C396&ssl=1

Mike Mckay is famous for many product launches such as Amazon Affiliate Luxury Running Gear, Offline Graphics Mega Pack, WP Directory Pro, and WP Central Hub, etc. Yes, he is an expert in affiliate marketing as well as a software producer.

You will learn many things and tactics from his product. With this launch, he has spent much time and energy to develop it. It will be a good choice for marketers who want to run marketing in Weight Loss niche from Amazon.

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