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Amazon (AMZN) Expands Prime Now 1-Hour Delivery to Milwaukee
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Amazon.com Inc.’s (AMZN - Free Report) Prime membership is getting bigger in the U.S. The latest city to get the one-hour delivery service is Milwaukee.
The one-hour delivery service, Prime Now, will now offer many daily essentials like milk, eggs, ice cream and diapers, among others, to members in Milwaukee. Also, customers can use Amazon’s speaker-like home automation device, Alexa, to order from Prime Now.
The new destination will definitely attract more customers to the $99/year Amazon Prime program, which is a significant revenue source for the company.
Coming to the price performance, over the past one year, shares of Amazon outperformed the Zacks categorized Electronic Commerce industry. While the industry gained 38.23%, the stock returned 48.88%.
Amazon Prime Now
In Dec 2014, Amazon rolled out the one-hour delivery service in a limited area in Manhattan. Amazon Prime Now delivers household items, and has added alcoholic beverage products for Columbus and Cincinnati customers, among others. Prime Now offers two-hour delivery for free and charges $7.99 for one-hour deliveries. All Prime Now items can be browsed and purchased through a dedicated app.
However, $7.99 might seem a shade steep, if only a few items are ordered. Nevertheless, Amazon offers substantial discounts on these items. So, customers can make up for the delivery charges. Also, there is a convenience cost that comes into play.
Bottom Line
It is important to understand the nature of Amazon’s core business. It is primarily an online retailer and competes with the likes of eBay (EBAY - Free Report) and Alibaba (BABA - Free Report) . This kind of business has a very low barrier to entry. It is cheaper to set up and attracts a lot of competition. Online retailers also face competition from brick and mortar stores like Wal-Mart (WMT - Free Report) .
Therefore, carving a niche in this business requires a lot of marketing, an excellent customer-service model and a rational pricing strategy. Dealing with all three and getting it right to maximize profits requires huge effort.
To be a formidable player in this space, Amazon needs to consistently offer excellent services.
Prime Now will be part of an enhanced delivery strategy — an important growth driver for Amazon.
As the perks of Prime members increase, subscription rises, expanding the operating margins of the company in turn.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
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Amazon (AMZN) Expands Prime Now 1-Hour Delivery to Milwaukee
Amazon.com Inc.’s (AMZN - Free Report) Prime membership is getting bigger in the U.S. The latest city to get the one-hour delivery service is Milwaukee.
The one-hour delivery service, Prime Now, will now offer many daily essentials like milk, eggs, ice cream and diapers, among others, to members in Milwaukee. Also, customers can use Amazon’s speaker-like home automation device, Alexa, to order from Prime Now.
The new destination will definitely attract more customers to the $99/year Amazon Prime program, which is a significant revenue source for the company.
Coming to the price performance, over the past one year, shares of Amazon outperformed the Zacks categorized Electronic Commerce industry. While the industry gained 38.23%, the stock returned 48.88%.
Amazon Prime Now
In Dec 2014, Amazon rolled out the one-hour delivery service in a limited area in Manhattan. Amazon Prime Now delivers household items, and has added alcoholic beverage products for Columbus and Cincinnati customers, among others. Prime Now offers two-hour delivery for free and charges $7.99 for one-hour deliveries. All Prime Now items can be browsed and purchased through a dedicated app.
However, $7.99 might seem a shade steep, if only a few items are ordered. Nevertheless, Amazon offers substantial discounts on these items. So, customers can make up for the delivery charges. Also, there is a convenience cost that comes into play.
Bottom Line
It is important to understand the nature of Amazon’s core business. It is primarily an online retailer and competes with the likes of eBay (EBAY - Free Report) and Alibaba (BABA - Free Report) . This kind of business has a very low barrier to entry. It is cheaper to set up and attracts a lot of competition. Online retailers also face competition from brick and mortar stores like Wal-Mart (WMT - Free Report) .
Therefore, carving a niche in this business requires a lot of marketing, an excellent customer-service model and a rational pricing strategy. Dealing with all three and getting it right to maximize profits requires huge effort.
To be a formidable player in this space, Amazon needs to consistently offer excellent services.
Prime Now will be part of an enhanced delivery strategy — an important growth driver for Amazon.
As the perks of Prime members increase, subscription rises, expanding the operating margins of the company in turn.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. Price and Consensus | Amazon.com, Inc. Quote
At present, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>