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Amazon has announced the launch of its drone delivery service ‘within months’.

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Amazon is due to offer discounts on warehouse storage fees for sellers that stock more of their product with the e-tailer.

Up to 75% discounts

Discounts of up to 75% will be offered to sellers that have sold more than 60 units of a product each month and sellers that hold products that have been specifically selected by Amazon.

In order to qualify for the discounts, the sellers in question must also retain four to eight weeks of inventory within Amazon’s warehouses. The offer is taking place from the 1st June up until 31st January 2020.

The promotion might persuade many sellers to embrace the offer, while Amazon is most likely to benefit from greater SKU availability, which in turn will help it achieve speedy fulfilment and shipping, in an environment where 1-day shipping is steadily becoming the new normal. Last year, 58% of Amazon’s total sales emanated from third-party sellers.

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Walmart has announced it’s rolling out free next day delivery on its most popular items in select geographical areas.

What’s in it?

Orders over $35 will be eligible for free next-day delivery, without the need to pay a membership fee. The offer will be initially available to customers based in Phoenix and Las Vegas, before expanding to customers based in Southern California over the next few days. The next-day service will cover 220,000 popular items from diapers and non-perishable food items to toys and electronics. The order cut-off times will differ from one location to another, and orders will be delivered mainly by national carriers, and in some cases, regional carriers.

Walmart aims to reach 75% of the US population by the end of the year. It also intends to add hundreds of thousands of products as the service expands.

Reaction to Amazon’s free one-day shipping for Prime members

Walmart’s announcement comes two weeks after Amazon has announced it’ll be investing $800 million in its warehouses and delivery infrastructure to upgrade its free shipping option to its Prime members to one-day delivery instead of two-day delivery.

Walmart has made substantial investments in order to reduce fulfilment lead times. Back in 2017, it has announced free, two-day shipping on more than 2 million items without the need for membership, as long as orders are over $35. Also, back in 2015, it has trialled ShippingPass, which offered three-day shipping on 1 million items, and was considered as an answer to Amazon’s Prime back in the day.

President and CEO of Walmart E-commerce, Marc Lore said: “We can offer fast, convenient shipping options because we’ve built a network of fulfillment assets that are strategically located across the U.S. We’ve also done extensive work to ensure we have the right products in the right fulfillment centers based on where customers are located and what they’re ordering.”

Reduced fulfilment costs

According to Marc Lore, the newly implemented next-day delivery service will cost cheaper than the two-day service, because eligible items will come from a single fulfilment centre located closest to the customer, which means orders will ship in a single box, or in as few as possible, as opposed to two-day deliveries which come in multiple boxes from multiple locations. In addition, Walmart is trying to reduce costs by optimising its range based on customers’ needs in a particular market. As an example, sunscreens would be available all year round for areas like Southern California or Phoenix, Arizona.

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Following its plans to halve shipping times for its Prime customers, Amazon is offering its employees the option of starting their own delivery business.

Expanding its Delivery Service Partner programme…

Essentially, Amazon is extending its Delivery Service Partner programme, which was launched last June, to its own employees by offering $10,000 in startup costs in addition to three months’ gross salary to help them setup their independent Amazon delivery business. Employees who participate in the scheme are able to lease customized blue vans with the Amazon smile logo on the side, in addition to taking advantage of other discounts including fuel, insurance and branded uniforms.

The move comes as Amazon is seeking to speed up its shipping time from two days to one for its Prime members. As such, the new incentives are considered as a way to increase the number of packages that are being delivered to its customers doorsteps.

…And decreasing its reliance on other carriers

The new employee incentive is open to anyone who wants to launch an independent delivery business. Indeed, it forms a part of Amazon’s plan to directly control more of its deliveries and reduce its reliance on other delivery providers such as USPS (United States Postal Service), UPS or FedEx.

200 businesses created since the programme’s launch

Meanwhile, 200 Amazon delivery businesses have been created since its launch last June. Amazon said that it expects to add hundreds more businesses by the end of this year.

Walmart announced the launch of a similar scheme to incentivise employees to deliver online orders in 2017. It subsequently pulled back from the initiative after it failed to gain sufficient traction.

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Presentations

22/05/2019
Amazon has a new network of staffed pick up points that allows customers to collect their Amazon parcels in-store at a partner location.
11/07/2018
Amazon has launched Delivery Service Partners, a new programme that allows entrepreneurs to start their own package delivery business under the Amazon brand.
02/05/2018
Amazon has announced that Prime members can now request in-car delivery through Amazon Key.

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