Amazon Prime is Unlike Any Other Service
Amazon.com, Inc. (NASDAQ:AMZN) has established an unrivaled position in e-commerce worldwide while also pursuing technical innovation in cloud computing—not to mention “branching out” projects, such as using drones to speed up shipping. However, for sheer revenue generation, “Amazon Prime” plays an especially strong role for the company.
Amazon’s CEO, Jeff Bezos, has a recipe for success that can best be understood by considering a combination of two ingredients: courage, flair, and diversification. OK, those are three ingredients but that’s the whole point—Amazon simply has no shortage of ideas.
Amazon Prime is just one of Bezos’ tools for success and it’s a highly effective one at that.
What is Amazon Prime? Simply put, Amazon Prime allows Amazon consumers to purchase a membership plan that allows them to benefit from exclusive advantages ranging from how fast products are shipped and delivered to special offers and services. While free two-shipping is included on all goods for Prime members, in select areas, the item you coveted and found on Amazon Prime could be delivered to you within a single working day.
Then there is “Amazon Prime Now.” In some cities, customers can receive their order within one hour for a $10.00 fee—or free if they have the patience to wait between eight and 24 hours. At this point, considering what it costs in business to leave an office, in expenses to take public transit or drive to a store, or even in time to leave the house, Amazon Prime starts to become more convenient and less costly than visiting a store in person.
Amazon Prime Is Full of Surprises
But Amazon Prime, like Amazon.com itself, benefits from the diversification and sheer reach of Amazon boss Jeff Bezos’ vision. Bezos has not only decided to broaden Amazon.com’s horizons, but he’s done so boldly. There’s Amazon Prime and On-Demand Amazon Prime Video to challenge YouTube and Netflix, while “Amazon Web Services” presents challenges for Verizon, IBM, and Microsoft with its cloud-computing developments. Bezos seems to see room to maneuver in those markets where others are too scared to tread given they are already densely populated with major players. No wonder Amazon’s market capitalization is more than $347 billion! (For comparison, Facebook’s market capitalization is approximately $338 billion.)
Usually, Amazon’s profits are reinvested in the company. During 2015, Amazon stock more than doubled in value, causing some sharp one-day double-digit drops from time to time. Still, it went from approximately $300.00 per share to the current $740.00 a share in less than two years.
Amazon Prime is just one of the tools that the company has at its retail ruling disposal. To explain that hysteria, it’s better to rely on sociology than economics, but there is no question Amazon is a force of nature and innovation.
Amazon Prime Innovation Gives Us the First Shipping Drones
No better way to explain the relentless innovation than the latest Amazon Prime evolution, “Prime Air.” This is not some new airline (though just give Bezos time…). Instead, Amazon Prime Air is a parcel delivery service that relies on drones.
When Amazon first announced its plan to use drones for Prime deliveries, it seemed like a provocation, perhaps exaggerated advertising, maybe even folly. Now, it could soon be reality. Amazon is starting to test the service in the U.K. Amazon Prime has an agreement with the U.K. CAA, the agency for British civil aviation. The company has been authorized to test drones loaded with packages in the rural and suburban skies of the U.K., with drones capable of carrying light parcels weighing up to five pounds. (Source: “That’s no Moon, it’s an Amazon Prime Air Delivery Drone,” Computer World, July 26, 2016.)
Amazon drones are going to make Amazon Prime capable of previously unimaginable services. If the U.K. tests are successful, Amazon Prime will have a wider and faster radius of action, meaning customers could receive packages within minutes. The day when you run out of toilet paper and simply click a button to have a drone come to your rescue is near.