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The Wall Street Journal reports that Amazon "is expanding ultrafast delivery options, a sign that it remains committed to pushing its logistics system for speed as it scales back plans in other areas."

What this means is that even as it trims spending and lays off thousands of employees in some areas of the business, Amazon plans to expand a network of same-day warehouse sites - "a fraction of the size of Amazon’s large fulfillment warehouses and are designed to prepare products for immediate delivery" - from the current number of 45 to as many as 150 in the next few years.  The Journal notes that the "sites have primarily opened near large cities and deliver the most popular 100,000 items in Amazon’s catalog."

The Journal reports that " Amazon uses contractors to make deliveries from the same-day sites. “Last mile” costs to deliver items from the locations can be around $3.30 a package, compared with $1.75 for packages at its traditional fulfillment sites, according to MWPVL. Using same-day sites can eliminate other costs that apply to the company’s standard fulfillment system."  Prime members who don't meet a $25 minimum on same-day orders are charged $2.99 for ultra fast deliveries.

Some context from the Journal:

"The expansions are happening at a crucial point for Amazon, which faces competition for fast-delivery options while Chief Executive Officer Andy Jassy puts a renewed focus on profits … With ultrafast delivery, the tech company is seeking new ways to use its broad logistics apparatus to compete with the likes of Walmart Inc. and Instacart, which also provide quick shipping options to customers. Walmart has used its thousands of stores to help fulfill fast online orders."

KC's View:

The problem is that while Amazon is at a critical juncture in its history, tripling the number of same-day delivery sites will take time;  this isn't something it can do overnight.

Which means that job one ought to be tightening up what it can do now.  The first step ought to be going through every item listed as Prime-eligible on its website, and if for some reason it can't be delivered within two days, it ought to lose that designation.  This should apply both to items that it is selling as a retailer, and those being sold in its Marketplace by third-parties.

At the moment, Amazon is caught in a cycle where it is disappointing too many customers too frequently.  Promises made to its shoppers - especially those who are spending money to belong to Prime - are a kind of contract, and Amazon is not living up to its side of the deal.

The most important thing Amazon can do is re-commit to its Prime promise.  From its inception, Jeff Bezos made Prime membership the foundation for almost everything else the company wanted to do.  His idea was to make Prime so compelling that it would be "irresponsible" for people not to be members.  

Well, the foundation is cracking.  Jassy has to get in there and shore it up.  Now.  Before the cracking turns into crumbling, and what has been built upon it loses structural integrity.