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Wednesday, October 27, 2021

Amazon.com, Inc. (NASDAQ:AMZN) One-Day Shipping Is Already Having a Big Impact

Amazon.com, Inc. (NASDAQ:AMZN) One-Day Shipping Is Already Having a Big Impact

Back in April, Amazon (NASDAQ: AMZN) CFO Brian Olsavsky announced the company’s plans to shift its Prime shipping program from two-day shipping to one-day shipping. By the start of June, Amazon could ensure one-day delivery on 10 million items nationwide. At the time, Olsavsky warned the company was investing an additional $800 million in its logistics operations to keep inventory stocked closer to shopper’s homes.

Late last week, Amazon’s efforts showed up in a big way on the company’s second-quarter earnings release. The costs added up and resulted in lower-than-expected profits. And those costs will keep climbing next quarter, negatively affecting Olsavsky’s outlook for third-quarter operating income. On the bright side, North America retail revenue growth accelerated, something Olsavsky attributed in large part to the transition to one-day shipping.

The impact on Amazon’s business is just starting to be seen, but it’s going to remain noticeable in Amazon’s results over the next year. Long term, the move should produce a positive impact if Amazon’s early results are anything to go by.

Investors can already see the positives

While the costs are rising, so are sales for Amazon’s retail business. North American sales increased 20% year over year, up from 17% in the first quarter. Some investors have expressed fear regarding Amazon’s slowing retail sales, but one-day shipping appears to have helped it win more sales that may have gone to more convenient competitors.

Olsavsky noted that the average selling price of goods sold during the quarter declined. That suggests shoppers are buying more convenience items. “I think what you’re seeing is just a lot more products enter the consideration set for our customers,” Olsavsky told analysts. “So things that maybe they can’t wait 2 days on, they can wait 1 day, and it lights up a whole separate usefulness for the Amazon site.”

That was one of the major points Olsavsky brought up during the prior earnings call, after announcing Amazon’s plans to shift to one-day shipping. If consumers can get more use out of their Prime membership by having the ability to receive convenience items the next day, suddenly, Amazon becomes a lot more valuable. While they’re buying convenience items, they might buy some other things as well, and those sales could’ve gone to Amazon’s competitors in the past.

Lower average sales prices will have a negative impact on Amazon’s margins in the near term, as Amazon ships out more packages with items that cost just a few dollars. Long term, though, the increased engagement from both buyers and merchants/vendors as well as Amazon’s improved logistics capabilities should help boost the average value of items in each shipment, so the costs don’t cut into margins as much.

Investors may have been scared by the earnings miss and disappointing outlook, but one-day shipping is a major evolution for the company. The negative impact of the increased costs involved has overshadowed the significant impact one-day shipping has already had on Amazon’s sales growth in just a month or so of its nationwide rollout.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1,907.74.

The projected upper bound is: 1,986.57.

The projected lower bound is: 1,838.52.

The projected closing price is: 1,912.55.


A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 24.2898. This is not an overbought or oversold reading. The last signal was a sell 11 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 41.98. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 9 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -222.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 9 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 6 period(s) ago.

Rex Takasugi – TD Profile

AMAZON COM closed down -30.600 at 1,912.450. Volume was 15% above average (neutral) and Bollinger Bands were 30% narrower than normal.

Open     High      Low     Close     Volume___
1,930.0001,932.2261,890.5401,912.450 4,493,190
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,975.46 1,897.35 1,748.34
Volatility: 16 26 46
Volume: 3,366,656 3,581,419 5,364,059

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


AMAZON COM is currently 9.4% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of AMZN.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on AMZN.O and have had this outlook for the last 28 periods.

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