Amazon Will Spend Buckets of Billions to Minimize Impact on Shoppers and Sellers During the Holidays

No supply chain crisis is going to stop the company from delivering the gifts you want this year, even if it has to shell out the big bucks.

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Photo: Sebastien Bozon / AFP (Getty Images)

By now, you probably know that it might be a bit difficult to buy all the gifts you want for the holidays this year. It’s one of the consequences of living through a global supply chain crisis. But Amazon, one of the world’s biggest online retailers, isn’t letting that or a range of other factors get in the way of its peak season. Its solution: buckets of billions.

In a news release announcing its third quarter results on Thursday, Amazon said it had made “extraordinary investments” across the company to satisfy customer needs during the pandemic—and it’s not done spending. The company will dish out “several billion dollars” in the last quarter of the year—a period encompassing the week before Black Friday through Christmas, which is generally its peak season—in order to mitigate possible shipping delays and stock issues.

Amazon CEO Andy Jassy said the company had always prioritized what was best for customers in the long-term over short-term profits.

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“In the fourth quarter, we expect to incur several billion dollars of additional costs in our Consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs—all while doing whatever it takes to minimize the impact on customers and selling partners this holiday season,” Jassy said in a statement.

“It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners,” he added.

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Jassy’s made his comments on Amazon’s future spending plans on the same day the company announced lackluster third quarter results. Its operating income decreased to $4.9 billion, compared to $6.2 billion in the third quarter last year. Meanwhile, net income decreased to $3.2 billion. It was $6.3 billion in the third quarter of 2020.

The global supply chain crisis is expected to cause shipping delays—which are determined by a myriad of factors, from container shortages and overwhelmed ports to natural disasters and a lack truck drivers and warehouse workers, among others—and affect product availability.

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Recent data from Adobe Analytics suggest that out-of-stock messages online will increase by up to 172% this holiday season compared to 2020, CNBC reported. The most affected product categories are expected to be apparel, sporting goods, baby products, and electronics.

While I understand that gifts are an important part of the holidays, instead of focusing on getting people more stuff they probably don’t need, it would be better to direct our efforts—and any buckets of billions—on making sure we have affordable access to things what we all need, such as food and other essentials. But hey, that’s not what the holidays are about, so who cares, right?