Why is Amazon shipping cost so cheap?
Reason why Amazon shipping cost is so cheap
This generations allows you to be able to shop freely and comfortably while staying at home, enjoying your meal or talking to friends at the same time.
The physical movement of shopping in your life has never become less essential. Among all kind of online shopping sites, Amazon is one of the most popular site because of its unique business model and delivery speed, not mention its unbelievable low shipping costs.
This time, lets figure out how can Amazon actually make the shipping fee too incredibly reasonable.
１：Existence of fulfillment center
Amazon has 11 fulfillment centers in Japan.
The fulfillment center is not just a stock warehouse, but a place where you work by orders. In other words, if you receive an order, you will immediately work at the fulfillment center until you can ship the item successfully.
Besides, the management of the fulfillment center is well performed by computer, the automatic transfer to a different fulfillment center if there is no product at the near-site fulfillment center of the delivery destination is also performed automatically.
This streamlined aggregation structure is one of the reasons for fast delivery and low shipping costs because Amazon can simply reduce the cost for employment and human resources.
２：Dealing with trading companies
Amazon is well known as a e-commerce website that provide products to customers but another main business is the trade amongst manufacturers and brokers who distribute products.
People and shipping companies that actually transports. Amazon thoroughly seeks a reasonable deal on either of them. Specifically, they will not trade unless the purchase price or shipping cost falls below a certain level, or take all measures to keep the other party in the transaction satisfied.
It is hard to have a rational transaction within humans since each of us is rational in our own way. In Amazon’s view, they try to make it rational to customers. These are all to keep shipping costs low, and are often referred to as customer satisfaction.
Amazon has consistently taken this customer leadership position, and as a result, shipping costs are cheaper.
３：Double consideration about shipping.
Another crucial element that brought the success of Amazon is the double consideration about shipping.
In order to reduce shipping costs, reducing labor costs is the key. One of the most expensive labor costs is redelivery.
Therefore, they make every effort to prevent redelivery. For example, by installing a delivery box, etc., it can be received through the delivery box even in absence, can be received directly at the shipping company’s sales office, or can be received at a convenience store near you.
The cost of shipping has been reduced through various methods implemented.