Amazon remains the biggest online retailer when it comes to Black Friday. Proven in a short time, Amazon has changed the shopping view of millions of consumers. As a matter of fact, Amazon altered the Black Friday tradition which the shoppers tend to stay at home rather than going to stores.
It’s quite a question if Amazon will here to stay as part of a shopper’s primary online option. In one of of the current news development about Amazon, the company’s operating income could be affected at 5% if the U.S. Postal Service proposed hike shipping cost will go into fruition.
According to Barclays analysts,
“Our math …suggests Amazon will have 5% lower retail operating income from this shipping cost inflation, if we assume there are no offsetting factors”.
The USPS suggested increasing the shipping cost of a small flat-rate box to $7.90 from $7.2. Also, the medium flat rate box from $13.65 to $14.35 is included. Moreover, the large flat-rate box from $19.95 could be risen to $18.90.
“Specifically, the USPS shipping rates for small and medium boxes, typically used by e-commerce companies, are proposed to be increased by 10% and 5% respectively,” Barclays analysts led by Ross Sandler wrote. “The price increases for packages suggested by USPS this year are higher than in prior years.”
President Donald Trump specifically had a big concern about the US Postal losing money because it has been the “delivery boy” of Amazon.
I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!
— Donald J. Trump (@realDonaldTrump) March 29, 2018
“The price increases reflect the best judgment of the Postal Service Governors, who are seeking to establish new rates that will keep the Postal Service competitive, while also providing the Postal Service with much needed revenue,” a USPS spokesperson said.
Absolutely, the increase in shipping will impact Amazon’s income. However, will Amazon pass it to the consumers? Will it happen just before the Black Friday week?