Profit was held back by a big jump in fulfillment costs, which increased 32.8% year-over-year in the fourth quarter and nearly 25% for the full year. Amazon spent $4.55 billion in the fourth quarter to fulfill customers’ orders, up from $3.4 billion in the same quarter a year ago, and the increase cannot be explained away by increases in Amazon sales, as the percentage of revenues spent on shipping also increased, from 11.6% to 12.7%.”
There is more than loyalty at stake for Atlanta-based UPS. This year, its Amazon account exceeds $1 billion. … The average cost to handle a parcel was about $8 last year.
Some analysts say the move could help position Amazon to offer shipping services to other companies, eventually competing with the likes of United Parcel Service and DHL Worldwide Express. … Amazon rolled out thousands of its own trailers and launched an Uber-like delivery service last year to handle the so-called last mile of delivery, taking packages from distribution centers to customers’ homes.