clock menu more-arrow no yes mobile

Filed under:

Amazon will spend ‘several billion dollars’ to avoid holiday shipping delays

New, 2 comments

‘It’ll be expensive for us in the short term, but it’s the right prioritization’

Illustration by Alex Castro / The Verge

Amazon wants to avoid holiday shipping delays as much as you do. The company said today that it plans to spend “several billion dollars” to avoid problems during the holidays, which might extend from product delivery issues to keeping items in stock. The money will be spent on increased pay for workers, heightened shipping costs, and mitigating supply chain issues.

“It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners,” Amazon CEO Andy Jassy said today in the company’s third-quarter earnings release.

The big spending comes as both a promise and a warning. Amazon’s earnings disappointed investors with a significant dip in quarterly profits from last year. That’s largely due to increased spending across the board — the company spent $3.8 billion more on fulfillment, $3.3 billion more on tech costs, and $2.6 billion more on marketing, to name just a few expenses — which ate into the quarter’s $110.8 billion in revenue, which was up 15 percent from last year.

Jassy, who was only installed as CEO on July 5th, said that these expenses were necessary to deliver good service to customers. “We’ve always said that when confronted with the choice between optimizing for short-term profits versus what’s best for customers over the long term, we will choose the latter,” he said. Jassy called the expenses, “extraordinary investments across our businesses to satisfy customer needs.”