Amazon’s logistic costs explosion
Shipping and fullfilment costs have grown more than 20-fold between 2009 and 2019
The success of Amazon Prime is continuing to thrive according to Amazon’s latest announcements of financial results in 2019: Amazon Prime has exceeded the 150 million mark in paying members worldwide. Also, “the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled in the fourth quarter compared to last year”, according to Amazon founder and CEO Jeff Bezos.
This development most likely contributed to the skyrocketing logistics costs of the tech giant over the past decade:
Amazon’s shipping and fulfillment costs together have increased to the twentyfold since 2009. Net sales however, although they have shown considerate growth in the same period as well, could not compensate for the increasing logistic costs. While shipping costs amounted to US$37.9 billion in 2019, fulfillment costs (e.g. costs of operating and staffing fulfillment centers) have even outperformed this figure, reaching US$40.2 billion in total.
While in 2009, the total logistics costs accounted for about 16% of net sales, in 2019, they summed up to almost 28%.
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