Amazon.com, Inc.

When Amazon launched Prime in 2005 with free two-day shipping, the industry standard for e-commerce delivery was 5–7 business days. Amazon's fulfillment network at the time consisted of approximately 10–15 large fulfillment centers, primarily located near transportation hubs in the U.S. interior — a network designed to minimize real estate costs rather than minimize delivery distance. Two-day shipping was achievable primarily for customers near these centers; for others, Amazon relied on carrier networks (UPS, FedEx) that added buffer days. As Prime membership grew and Amazon's competitive position became dependent on delivery speed, the company recognized that further cycle time compression — from two-day to same-day — required a fundamental redesign of where inventory was held, not just how it was shipped.

Amazon invested over $60 billion in fulfillment network capacity and redesign from 2012–2021 to compress delivery cycle times:

• Dense fulfillment network: Amazon expanded from approximately 40 fulfillment centers in 2012 to over 185 by 2020, locating new facilities within 20–30 miles of major metropolitan population centers rather than at inland transportation hubs. This repositioning placed inventory physically closer to customers, cutting last-mile distance.
• Sortation centers: Amazon built a secondary tier of 100+ sortation centers that receive packages from fulfillment centers and sort them by delivery route — enabling Amazon Logistics drivers to begin routes already organized by stop sequence, reducing handling time.
• Delivery stations: Amazon built 600+ last-mile delivery stations — small facilities (20,000–50,000 sq ft) in urban and suburban areas where drivers begin and end routes — compressing last-mile cycle time by reducing the distance from sortation to doorstep.
• Amazon Logistics (AMZL): Amazon built its own last-mile delivery fleet from scratch, displacing UPS and FedEx for a growing share of deliveries. Internal control of last-mile delivery eliminated carrier-imposed scheduling constraints and allowed Amazon to expand Sunday and holiday delivery without surcharges.
• Inventory pre-positioning: Amazon's demand forecasting algorithms pre-position inventory in fulfillment centers nearest anticipated demand, reducing the probability that an ordered item must be shipped from a distant warehouse.

• Same-day delivery in 90+ U.S. metro areas by 2023: Amazon expanded same-day delivery to over 90 U.S. metro areas by 2023, covering the majority of the U.S. population — a cycle time reduction from the 5–7 day industry standard of 2005 to under 24 hours.
• 7+ billion items same-day or next-day globally in 2023: Amazon's 2023 Annual Letter to Shareholders (April 2024) reported more than 7 billion items arriving same or next day, including more than 4 billion in the U.S. and more than 2 billion in Europe — a nearly 70% year-over-year increase from 2022.
• ~$61 billion in total capital expenditure in 2021: Amazon's total capital expenditure reached approximately $61 billion in 2021, spanning fulfillment network expansion, logistics infrastructure, and AWS — reflecting the scale of infrastructure investment required to achieve same-day delivery at national scale. The company does not separately disclose a cumulative fulfillment-only figure across years.
• Amazon Logistics covers 67%+ of own deliveries: Amazon's internal logistics network delivered approximately 67% of its own packages in the U.S. by 2022, reducing dependence on third-party carriers and improving delivery time control.

• Amazon Prime flywheel: Prime membership fees and Prime-driven consumer engagement provided the revenue stream to justify $60B+ in fulfillment infrastructure investment
• Demand forecasting capability: accurate pre-positioning of inventory (knowing where demand will be before orders are placed) is a prerequisite for fast delivery — without it, orders must be shipped cross-country from wherever inventory sits
• Delivery Station Operator (DSO) model: Amazon's use of independent delivery service partners (instead of full W-2 employees) reduced capital and management burden per delivery stop while maintaining service standards
• Scale: the economics of dense urban fulfillment only work at Amazon's order volume — the fixed cost of a delivery station requires thousands of daily deliveries in its catchment area to be cost-effective