Amazon Gains Another Edge With Sunday Delivery

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Nov. 11 (Bloomberg) -- On today's "Drill Down," Bloomberg's Cory Johnson reports on Amazon's plans for Sunday USPS deliveries. He speaks on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Amazon and the postal service have apparently been working together, right?


They said already this thing is available in los angeles and new york.

If you're amazon and you see your stock chart go up like crazy based not on profits, because amazon barely has them, but based on revenues, what do you do to get more revenues?

You add another day to the week.

You can't get eight days of the week when you're at six so they've created another day for amazon to sell and it's kind of an amazing thing.

When we look -- it also gives them quite an edge on the competition, if no one else is offering sunday delivery, right?


It's in los angeles and new york.

They say next year it's going to go to dallas, houston, new orleans, and phoenix.

They're saying it's only for their amazon prime customers.

The reason they've got that leverage over their competitors is because they spend so much money on postage.

In this last quarter alone, this is the third quarter, it's not as big as their giant fourth quarter, they had over $1.5 billion in sales in shipping costs alone.

Think of that.

$1.5 billion in shipping.

A lot of that money going to the u.s. postal service, not just for the things that start with usps, even though they're using fedex and u.p.s. at the fulfillment center door, that last mile delivery often happens at the u.s. postal service.

Working with the u.s. postal service to be more innovative.

What does the post office have to say about this?

Aren't they cutting back?

The post office is trying to be smart about where they're cutting back and where they're adding services.

At least that's what they say.

Our colleagues talked to the u.s. post master general last week.

Listen to what he had to say.

I'll level with you there.

People think we should move this five-day delivery but here's a proposal.

Five-day mail delivery, six-day package delivery and in some cases in the not so distant future, we'll be delivering a lot of zip codes seven days a week from a package standpoint.

That's the way the world is working.

You can't hang onto things that don't make sense.

I see the resemblance.

I like it.

It would be a lovely place.

I think you could do a lot of things.

There's a lot of turnover at the post office.

, no it's interesting to hear them actually acknowledge the world that we live in but it's also interesting to see amazon go after the seventh day.

What does it mean?

Because they also have a really extensive relationship with u.p.s., they work with u.p.s. as well.

They're going to work with all of these guys.

They get a lot of revenue from shipping.

It's not just that they're spending the money on shipping, of course people pay for packages and it's a gig thing for them.

Despite all the revenue they get for shipping in the last quarter, their losses from shipping -- it's fundamentally a loss for them.

They think that they're willing to lose money in shipping, $1.5 in the last quarter, just to get more revenues from selling products.

What about the cities where this is rolling out first.

L.a., new york, what does that tell but amazon's plans?

They're obviously going for places where the largest populations are concentrated around small areas.

These are areas that won't be affected by blue laws and things that keep them from selling.

Whether it's west virginia michigan or northern new jersey, they're going after the places where they can actually make these deliveries happen.

But it also shows that they're really pushing in the u.s. -- interestingly, international has declined as a percentage of their business.

You'd think where there's more room for this growth is internationally, but internationaly the percentage of revenues has fallen in each of the last three years for am zofpblet you can see with this push that could happen even more so in the future.

Maybe it's because companies like ali baseballa are stealing their thundser.

Maybe it's because you andry spending so much on amazon.

We are spending a lot.

Thank you.

One of yahoo!'s senior expects

This text has been automatically generated. It may not be 100% accurate.


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