This is definitely true. Back in the pre-Prime days (ie, 5+ years ago) Amazon would send your package as soon as they possibly could, and even with the super saver shipping you'd still often get your order less than the minimum 5 days.

Now I'll order something on Amazon (not a Prime member) and they'll sit on the package for a week and then overnight it to me.

I'm not a fan. Paying more for faster shipping didn't used to mean that cheaper/free shipping always took longer, it just meant that you were guaranteed to get it quickly.

This may be because it's cheaper/better for them to ship other orders instead of yours, since they can only handle a finite amount of orders per center at a time :)

More likely their distribution network has improved so much that it's no longer cheaper for them to ship stuff slowly, and they make money from non-prime next-day shipping.

It's a financial hack. Amazon has low margins so cash flow is king.

They make money off you either way, when they sit on the order for 5 days, they probably book your revenue a month before they need to pay for the product.

Do they charge your before the order actually ships? I don't think they do.

Charging your credit card might not coincide with their definition of revenue recognition.

What if a customer cancel the shipment?

The point is that they don't hold the inventory.

They buy stuff on net-30 terms, and ship stuff to you the day it arrives. WalMart does similar things for many products -- they make vendors carry inventory until it arrives at a DC.

Unless they've changed something recently, they don't. I haven't paid enough attention lately to be sure.

That is one of the two reasons I signed up for prime in the first place, I'd always get super saver and 99.9% of the time it'd arrive in 2 days. All of a sudden it started taking the full time.

I don't remember exactly what the other reason was, but it involved a one time money savings which was > the cost of a year of Prime at the time.

So I can imagine that this was originally a bug. Probably at some point they reached the capacity of things they could physically get out of their warehouse and onto a shipping truck per day, regardless of whether that truck is heading to other trucks or to a plane. So you need to prioritize, every day, the things that must go out overnight to meet the deadline. If you're full and you have things that could be shipped tomorrow, they wait tomorrow. Then tomorrow, or a week later, or whatever, those things are now on the list of stuff that must go out overnight.

Ideally your capacity isn't filled up by the must-be-overnight stuff. But if you're busy for a few days, suddenly a bunch of regular stuff turns into must-be-overnight stuff. And that delays next week's regular stuff, which then turns into must-be-overnight stuff next week. and there's no way to recover from this automatically. You could recover if you manually added more shipping capacity, or if you told customers that ground shipping would take even longer (so you can spend a few days clearing out backlog), or something.

That said given that the current state incentivizes customers to do exactly what you did, I wouldn't want to be the manager who prioritized fixing the bug....

Wouldn't that explanation only work if their load is high enough that they frequently hit the limit on how much can be shipped per day, but they rarely hit the limit on how much can be shipped per 5 days?

If the load is lower than this, then deferral of non-Prime orders would rarely be needed. If the load is higher than this, deferral would rarely help.

If their load is in that window where deferral can help with load, the amount of deferral for a given warehouse should vary from order to order all the way from no delay to several days.

My recollection from before I got Prime was that almost all my free shipping 5 day orders shipped the same day, and then over a very short time that changed to them almost all being delayed by an amount that depended on how far the warehouse was from me. I lived in the same city as their biggest warehouse, for instance, and orders served from there were almost always delayed 4 days and then overnighted. That indicates that the deferral was not based on load.

Just do an Uber and surge that price!

If you use free delivery, they seem do this more often than not lately.

For years free delivery would often be as fast as other methods, sometimes next day, even if ordered late in the day.

Now they will usually sit on the order for a suspiciously consistent 48hrs before it goes to picking status.

I don't mind, it's very rare I really need something next day.

I have an open order right now they've been sitting on for 5 days. It's fine with me. I don't need the instant gratification and don't make enough orders to justify Prime. Just pretend you're living in the era of Sears & Roebuck ca. 1916 and you get your order turned around in the phenomenal time frame of 10 days with doorstep delivery rather than waiting a couple months and having to make the voyage out to the train depot to pick up your stuff.