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First Amazon profit drop in two years

Operating profit at Amazon dropped 13.5% to $3.2bn (£2.5bn) year on year in the three months to 30 September, as it continues to invest heavily in one-day shipping.

The decline marks the ecommerce giant’s first drop in profits since 2017. Net profit decreased to $2.1bn (£1.6bn) in the third quarter, compared with net profit of $2.9bn (£2.3bn) in the same period in 2018. 

However, turnover increased 24% to $70bn (£54bn) in the same three months. 

Amazon has stepped up its investment in its logistics and delivery capabilities after promising in April that it would make one-day shipping the new normal for Amazon Prime members, rather than the two-day shipping that it has long offered. The company estimated it would spend $800m (£622m) in the second quarter of this year to do this.  

“We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” said Jeff Bezos, Amazon founder and CEO. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers. And although it’s counter-intuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfilment centres very close to the customer — it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday.”

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