Hi, recently I read an article talking about amazon’s costs in their logistics.
First of all, Amazon is one of the biggest enterprises in e-commerce due to, basically, the buying experience they offer, in other words, due to their logistics, due to their unique delivery service, which is faster and sometimes cheaper compared with the competition. But obviously such an extraordinary service isn’t for free.
The graph explains the economical effort that Amazons policy in logistics requires, and on the other hand explains us why is getting bigger and bigger. As we can see in the graph, the logistics costs for Amazons have been always higher than the revenues that their policy in logistics offer (payments for delivering costs or for premium memberships), showing how much important is logistics for them.
However, the point, is also the quantity they invest, which apart from being very large, is always growing, coming from 884 millions for 2006, until reaching the quantity of 4.560 millions of euros in 2016, meaning that they will be always investing just for improving their logistics, because they know that’s the key of their success.