Same-day shipping has been reported as a key part of Amazon.com’s current strategy, but CFO Tom Szkutak offered a sort-of denial of those rumors during today’s conference call discussing the company’s second quarter earnings.
“We don’t really see a way to do same-day delivery on a broad scale economically,” Szkutak said.
He did note that Amazon is aggressively opening new fulfillment centers with the goal of reducing shipping times, saying, “We’ll continue to work on behalf of customers to serve them even better.” But he repeated that it’s not feasible to do same-day shipping “on a broad scale.”
Now, that doesn’t mean Amazon won’t do more same-day shipping in the future, just that if it did, the availability would be limited. Nor does Szkutak’s statement clash entirely with the story earlier this month in the Financial Times (the link requires FT registration), which claimed that Amazon has shifted its focus from avoiding sales taxes (effectively giving shoppers a lower price) to an emphasis on speed so that it can “offer same-day delivery to more consumers.” Szkutak’s comments do suggest that focusing primarily on the same-day aspect of Amazon’s plans, which is how several bloggers responded to the FT story, may be a little misguided.
Speaking of taxes, Szkutak downplayed the effect that sales taxes would have on Amazon’s bottom line. He said the company favors a nationwide policy rather than state-by-state taxes, and that’s what it’s lobbying for. But in the meantime, he says Amazon is already paying sales tax or value-added tax in a number of geographies, and when it does, it sets prices without taking the tax into account. Yet Szkutak says “customers are coming to us because we have value irrespective” of whether or not they have to pay sales tax.
Amazon.com, Inc. (AMZN), is a leading global Internet company and one of the most trafficked Internet retail destinations worldwide. Amazon is one of the first companies to sell products deep into the long tail by housing them in numerous warehouses and distributing products from many partner companies. Amazon directly sells or acts as a platform for the sale of a broad range of products. These include books, music, videos, consumer electronics, clothing and household products. The majority of Amazon’s...