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On May 13, 2019, Amazon made a HUGE announcement; Brian Olsavsky, Chief Financial Officer, stated that the company would begin offering a $10,000 termination (incentive) bonus and 3-months’ salary for employees wishing to venture out and commence in Amazon’s new 1-day delivery for its Prime customers within the United States, Spain, and United Kingdom. According to Amazon, this incentive would assist employees in their startup costs so they “can more easily get their package delivery companies off the ground.” Without a doubt, Amazon has solidified itself in its purpose to reign supreme over “just-in-time” freight and doorway delivery in a timeframe that many other companies attempt to mimic, but few succeed.
The question is, what will be the price tag for such a service? In 2014, Amazon increased its annual Prime Membership from $79.00 to $99.00; in January 2018, again Amazon increased fees for service by raising monthly Prime rates from $10.99 to $12.99 but failed to increase the annual price. With Amazon’s new promise of 24-hour delivery, speculators state that the company will have no choice but to yet again increase its rates across the board in its worldwide attempt to monopolize doorstep package delivery. What’s the worry some say? How can the giants of UPS, FedEx, and Walmart keep up?
On Tuesday, May 14, 2019, Walmart announced that they would enter the ring to battle Amazon to fight in the space of e-commerce, stating that they would also be introducing 1-day delivery for its most 220,000 popular items. However, unlike Amazon, Walmart cited a $35.00 minimum order, with only the West Coast being implemented immediately, with expansion across the nation by the end of 2019. Should Amazon be scared? I would submit, NO – with Amazon, no minimum order is necessary, and Walmart lags Amazon’s current footprint of warehouses and distribution centers. Also, Amazon has solidified itself in both “just-in-time,” LTL and long-haul transportation services.
Within the last 18-months, Amazon has poured millions of dollars in employee education and incentives that enable its workers to utilize monies for additional opportunities both within the company and abroad. Amazon’s Career Choice program allows for eligible employees to pursue a certificate or diploma in qualified fields of study, leading to an in-demand job, with the company paying up to 95% of tuition and fees. With transportation and logistics being the backbone of Amazon’s e-commerce and delivery, its employees and services are leaps and bounds ahead of its global competitors.
With not so much of a peep from Capitol Hill or federal regulatory offices on Amazon’s announcement, just how much SMILE is there to go around? Will the feds continue to allow Jeff Bezos’ empire to expand without consequence, or, will this new initiative bring Congress to hit the “Pause Button” on Prime finally? Is too much of a good thing always a good thing or will the American way of “Gotta Have it, and Now” prevail, with “Capitalism in Cardboard” coming to every American home in 24-hours or less? Time will tell what action if any will occur, but in the interim, smiling faces will continue to grace the doorways of Americans who refuse to wait! The biggest question remains, can American infrastructure keep up?