Amazon's challenge to expand same-day delivery

Filed in archive News on May 28, 2007

Amazon.com, which has said its shipping programs aren't profitable, is looking to expand a same-day delivery service that's now limited to New York, a company executive said.

But Mike Bhaskaran, Amazon.com's new transportation director, provided few details while speaking at a Transportation Club of seattle luncheon.

His comments were part of a presentation in which he said the world's largest Internet retailer was continually looking for more ways to be consumer-centric for its 61 million active customers.

During an interview, Bhaskaran said he thinks an expansion could occur "very soon," and it would be ideal if Seattle-based Amazon.com could "do it all over the country."

Such an expansion likely would generate more sales, but it's unknown whether the service would make money or break even. Amazon.com launched its same-day service in New York earlier this year. If orders are received by 11 a.m., products can be delivered to select areas by the end of the day, Bhaskaran said. In some areas around Manhattan, he said, products are delivered the next morning. Cost varies based on the product that's shipped and its weight.

In my point of view, the plan looks quite ambitious but I also agree with editorial staff at SC Digest that:

Although the initiative will likely result in increased sales for the internet retail giant, the question remains as to whether the service will be profitable or merely create more headaches than rewards.