Amazon increased its shipping costs 10% in the third quarter of 2021 in year-on-year terms, to $ 18.498 million.
The shipping costs to receive products from your suppliers are included in your inventory and are recognized as cost of sales when the products are sold to your customers.
Thus, shipping costs, which include sorting and delivery centers and transportation costs, were $ 15.1 billion and $ 18.1 billion in the third quarter of 2020 and the third quarter of 2021, and $ 39.7 billion and $ 53 billion. for the nine months ended September 30, 2020 and 2021.
To continue to grow as its customers accept and use its shipping offers at an ever-increasing rate, the company uses more expensive shipping methods, including faster delivery, and offers additional services.
At the same time, Amazon seeks to mitigate shipping costs over time, in part by achieving higher sales volumes, optimizing its fulfillment network, negotiating better terms with its suppliers, and achieving better operational efficiencies.
Cost of sales consists primarily of the purchase price of consumer products, inbound and outbound shipping costs, including costs related to sorting and delivery centers and where the company is the transportation service provider, and digital media content costs where you record gross revenue, including video and music.
The increase in cost of sales in absolute dollars in the third quarter of 2021 and for the nine months ended September 30, 2021, compared to the comparable periods of the previous year, is mainly due to the increase in shipping costs and product as a result of increased sales, the costs of expanding its compliance network, and higher wages and compliance network incentives and inefficiencies that result from a restricted labor market and global supply chain constraints.
Amazon serves consumers through its physical and online stores and focuses on selection, price, and convenience.
It designs its stores to allow the company itself and third parties to sell hundreds of millions of unique products in dozens of product categories.
For their part, customers access their offers through their websites, mobile applications, Alexa, devices, streaming, and by physically visiting their stores.
Amazon also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, and other devices, and develops and produces multimedia content.
In addition, it offers Amazon Prime, a membership program that includes unlimited free shipping on more than 100 million items, access to unlimited streaming of tens of thousands of movies and TV episodes.