Amazon began to get involved in shipping industry.
Amazon.com (NASDAQ:AMZN) released its first-quarter earnings after market close on Thursday. The e-commerce titan reported slowing revenue of $59.7 billion, up 17% year over year, and net income of $3.6 billion, resulting in earnings per share (EPS) of $7.09, which soared 117%. Both numbers topped analysts’ consensus estimates that called for revenue of $59.65 billion and EPS of $4.72.
The e-commerce giant launched a trial version of its online freight-brokerage platform on Friday, undercutting market prices by more than a quarter, according to Baydailynews.com.
Amazon, which delivered a first-quarter earnings beat last week, relies on a nationwide network of trucking carriers to move huge volumes of products across America. It has decided to cut out the intermediary and act as the broker between shippers and truckers. As a result, it should have greater control over its access to trucking capacity and the price it pays.
Amazon could be sticking to a tried-and-tested recipe for market domination: undercut competitors and rack up losses as it captures market share, and then raise prices and turn a profit once it’s gained traction and scale and driven rivals out of business.
“Tap into the scale of Amazon as we extend our carrier network to give you best-in-class service at great rates,” the platform’s website says.
ays after raising the bar for retailers by moving from two-day to one-day shipping for Prime members, Amazon is racing to disrupt another industry. The e-commerce giant launched a trial version of its online freight-brokerage platform on Friday, undercutting market prices by more than a quarter, according to baydailynews.com
Brian Olsavsky, Amazon’s CFO, provided details:
We’re currently working on evolving our Prime free two-day shipping program to be a free one-day shipping program. We’re able to do this because we’ve spent 20-plus years expanding our fulfillment and logistics network, but this is still a big investment and [we have] a lot of work…ahead of us.
Amazon has been offering two-day or faster shipping for years. Depending on the product and the markets, the company has offered one-day or same-day shipping, even going as far as to offer one- or two-hour shipping for Prime Now, which delivers household essentials.