London Daily

Focus on the big picture.
Saturday, Feb 21, 2026

How Amazon Can Afford to Ship a $2 Stick of Deodorant to Your House by Tomorrow

How Amazon Can Afford to Ship a $2 Stick of Deodorant to Your House by Tomorrow

Amazon's dropping the "add-on item" tag from a lot of its inventory.

Amazon made waves when it announced Prime's move from two-day to one-day shipping. Over the last few months, it's taken steps to expand one-day shipping to more and more items, and its most recent effort involves removing barriers for one-off orders of low-priced products -- items like a $2 stick of deodorant.

Previously, Prime members had to include most sub-$5 products with another item in order to qualify for their free shipping benefit. Now, many of those items are Prime eligible on their own, and Amazon could deliver them to your house the next day. The ability to ship millions of items in one day with no order minimum is a huge competitive advantage for Amazon, even over its brick-and-mortar competitors.


Owning the logistics network and scale

The biggest contributing factor to Amazon's ability to ship inexpensive items quickly is that it's already operating a large portion of its shipping itself. It's investing in more and more cargo planes (now with 50 leases) and it's opening several air hubs. Its new hub in Forth Worth, Texas, opened at the beginning of the month. It'll open another one in Cincinnati in 2021 capable of supporting 100 cargo planes and 200 takeoffs and landings per day.

Amazon is also taking more control of its last-mile delivery, relying less on its partners. Amazon's contractors will account for 23% of deliveries this year, according to an estimate from Cowen analyst John Blackledge. He expects that number to climb to 43% by 2024.

Amazon's growing share of its own deliveries is a result of its scale and its ability to cherry-pick the most cost-efficient deliveries. As Amazon increases order volume and the number of shipments headed to the same area, the company is increasingly incentivized to ship more of its own orders. It's already sending a plane and truck to the area anyway, so the marginal costs continually decrease. That's why CFO Brian Olsavsky said it's often both faster and less expensive for Amazon to ship orders itself than to rely on its shipping partners.

And that's why the e-commerce titan can afford to tack on a small box holding a $2 stick of deodorant to a delivery manifest at no additional cost to the consumer; the marginal cost for Amazon is often far less than if it was using a shipping partner.

That's not to say there are no costs. Amazon's probably still losing money on these small-item orders. But it's able to lose less money than anyone else, and the benefits could be huge.


Making everyone a Prime member

Fast shipping on low-priced convenience items or consumer staples had a noticeable impact on Amazon's sales in the second quarter. North American sales accelerated to 20% growth year over year, and Olsavsky attributed the acceleration to Amazon's one-day shipping efforts. Consumers seem more likely to buy items like deodorant or batteries if they can get them the next day instead of making a run to a local store just for one item.

That trend should continue as Amazon makes more stand-alone items available for one-day shipping.

Importantly, fast shipping on these items gives consumers yet another reason to subscribe to Prime. Prime membership in the U.S. is starting to reach a saturation point, but this could be a catalyst that unlocks even more growth in the program.

Continuing to grow Prime could be a massive boon for Amazon. First of all, Prime members spend more on average than nonmembers. The pattern has held true even as Prime scales, indicating Prime encourages more spending on Amazon and not just that those spending on Amazon are more likely to sign up for Prime. The program drives loyalty, encouraging consumers to at the very least start their online shopping search on Amazon.com.

Not only do Prime members spend more on Amazon, the increased number of searches thanks to growing Prime membership should also lead to greater ad revenue for the company. Ad revenue reached about $11 billion over the trailing 12 months.

Moreover, more Prime members shipping items via Prime means greater volume and density of shipments. As such, it may become even less expensive for Amazon to ship items itself, creating a virtuous cycle as more and more items become eligible for one-day shipping. Increased shipment volume could eventually open the door for Amazon to offer shipping services to other businesses to truly take advantage of its scale and turn its shipping expenses into a profit center.

Amazon is willing to take a loss on some small shipments now in order to grow Prime and other parts of its business that could become huge sources of profits in the long run. And that's bad news for brick-and-mortar competitors.


Should Amazon be on your buy list? It's on ours...

Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has quadrupled the S&P!*

Tom and David just revealed their ten top stock picks for investors to buy right now. Amazon made the list -- but there are 9 other stocks you may be overlooking.

Newsletter

Related Articles

0:00
0:00
Close
OpenAI CEO Sam Altman praises the rapid progress of Chinese tech companies.
North Korea's capital experiences a significant construction boom with the development of a new city district dubbed 'Pyonghattan'.
New electric vehicle charging service eliminates waiting times
Vox Populi confronts Justin Trudeau at Davos over vaccination policies
Poland's President Karol Nawrocki ENDS support for Ukrainian citizens:
The mayor of Rotherham in Britain
One day after ex-Prince Andrew's arrest, British police are searching his former home, while U.K. lawmakers will consider introducing legislation to remove him from the line of royal succession
Vandana Shiva reminding the world that Bill Gates did not invent anything.
Italy's PM Giorgia Meloni highlights record employment and economic growth
UK Confirms Preferential U.S. Trading Terms Will Continue After Supreme Court Tariff Ruling
U.S. and U.K. to Hold Talks on Diego Garcia as Iran Objects to Potential Military Use
UK Officials Weigh Possible Changes to Prince Andrew’s Position in Line of Succession Amid Ongoing Scrutiny
British Police Probe Epstein’s UK Airport Links and Expand High-Profile Inquiries
The Impact of U.S. Sanctions on Cuba's Humanitarian Crisis: A Tightening Noose
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
British Co-founder of ASOS falls to his death from Pattaya apartment
Early 2026 Data Suggests Tentative Recovery for UK Businesses and Households
UK Introduces Digital-First Passport Rules for Dual Citizens in Border Control Overhaul
Unable to Access Live Financial Data for January UK Surplus Report
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
UK ‘Working Closely with US’ to Assess Impact of Supreme Court Tariff Ruling
Trump Criticises UK Decision to Restrict Use of Bases in Potential Iran Strike Scenario
UK Foreign Secretary and U.S. State Chief Hold Strategic Talks as Tensions Rise Over Joint Air Base
Two teens arrested in France for alleged terror plot.
Nordic Fracture: How Criminal Scandals and Toxic Ties are Dismantling the Norwegian Crown
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
King Charles III Opens London Fashion Week as Royal Family Faces Fresh Scrutiny
Trump’s Evolving Stance on UK Chagos Islands Deal Draws Renewed Scrutiny
House Democrat Says Former UK Ambassador Unable to Testify in Congressional Epstein Inquiry
No Record of Prince Andrew Arrest in UK as Claims Circulate Online
UK Has Not Granted US Approval to Launch Iran Strikes from RAF Bases, Government Confirms
AI Pricing Pressure Mounts as Chinese Models Undercut US Rivals and Margin Risks Grow
Global Counsel, Advisory Firm Co-Founded by Lord Mandelson, Enters Administration After Client Exodus
London High Court dispute over Ricardo Salinas’s $400mn Elektra share-backed bitcoin loan
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Former Student Files Civil Claim Against UK Authorities After Rape Charges Against Peers Are Dropped
Archer Aviation Chooses Bristol for New UK Engineering Hub to Drive Electric Air Taxi Expansion
UK Sees Surge in Medical Device Testing as Government Pushes Global Competitiveness
UK Competition Watchdog Flags Concerns Over Proposed Getty Images–Shutterstock Merger
Trump Reasserts Opposition to UK Chagos Islands Proposal, Urges Stronger Strategic Alignment
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Liberal Senator Michaelia Cash Accuses Prime Minister of Lying to Australians
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
A Lunar New Year event in Taiwan briefly came to a halt after a temple official standing beside President Lai Ching‑te suddenly vomited, splashing Lai’s clothing
Jillian Michaels reveals Bill Gates’ $55 million investment in mRNA vaccines turned into over $1 billion.
Ex-Prince Andrew Mountbatten-Windsor's arrested
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
×