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Amazon Prime delivery hit a new milestone this year: As of July 30, more than 5 billion items have arrived on the same or next day from when they were ordered, which is up 30% year over year. And the majority of these orders (more than 60%) didn’t come from Amazon’s own stock, but from independent sellers who used its fulfillment services.
The milestone isn’t the first time the e-commerce giant has touted its need for speed. In his annual letter to shareholders earlier this year, CEO Andy Jassy noted that the company continues to break Prime Delivery records. In 2023, he said, the company delivered 7+ billion items on the same day or overnight. He also said “regionalization” was behind the acceleration, as Amazon expanded its same-day facilities and “re-architected” its logistics network to bring warehouses closer to customers.
The result of these efforts was a reduction in cost to serve that allowed the company to expand its assortment and bring down prices.
Working smarter, not harder: With the new announcement, Amazon again emphasized the importance of regionalization and the expansion of its same-day delivery network, but it also called out new tech investments, including “leveraging advanced machine learning algorithms to predict product demand and improve our inventory placement.”
The combination of machine learning and “regionalized inventory” allows Amazon to ship more orders from a single local site. This is cutting down on transportation distances, and, by extension, costs, because the right products are available in the right place without having to shuffle items between different logistics hubs and warehouses.
Rival Walmart has similarly invested in AI-powered technology to better predict demand and move inventory accordingly.
An additional upside of this investment is that Amazon is consolidating its customers’ orders. “Through scaling this effort in the first half of the year, we increased the average number of items per box in the US compared to the same period in 2023, which reduced the number of required deliveries for these items,” the company said.