On Thursday, Amazon.com, Inc. (NASDAQ:AMZN) announced that it would broaden its same-day delivery service to reach more clients in the San Diego and Tampa Bay.
The expansion will allow the company to boost its revenue by introducing this service to the targeted region. Same-day deliveries have become more of a sensation to consumers, thus generating more appeal. It has thus been of the company’s best revenue streams. Expanding it to new regions with potential for continued success is the next logical step.
Amazon charges $5 for each order delivered to its Prime members using the same-day delivery service. Non-members are charged $8.99 for each order. The company has introduced a new package where it will now offer free same-day shipping to all its prime members for all purchases above $35.
According to Prime’s executive, Greg Greeley said that the online retailer is sure that same-day deliveries will increase drastically especially now that it is free. Amazon introduced the prime service ten years ago. At the time of its introduction, it was free for two-day deliveries. The service subscription was $79, but the company raised it to $99 in 2014.
The same day delivery service was introduced in 2009. The hourly delivery service was the latest introduction brought on board in 2014. Prime has developed into Amazon’s major driver, making it the ideal platform to test new services such as deliveries by drones, movies, and TV programs.
In its first quarter reports this year, Amazon reported that it had increased its prime membership by 50% in 2014. The online retailer also announced that holiday orders in December last year were ten times more than the number of orders in 2013.
The same-day delivery service is active and in effect in some major cities such as Baltimore, New York, San Francisco, Atlanta, Seattle, Philadelphia, Boston, and others.
Amazon.com, Inc. (NASDAQ:AMZN) expects more people to subscribe to its prime service by the end of the year. The company stands to benefit from more income especially now that the service is free.
