In October of 2004, a man named Charlie Ward worked for Amazon, and he was growing increasingly frustrated with the concept of multiple-clicks to purchase and complicated metrics on shipping fees. He expressed this frustration and proposed a flat fee that customers could pay once a year to receive free shipping on all their purchases. This idea with some tweaks became the foundation for Amazon Prime.
An optional membership that would allow members to receive free two-day shipping all year, on all products for a flat fee of $79. Although we can see the genius in offering a prime membership, people were naturally skeptical of the idea.
Jeff Bezos, the creator of Amazon, gave the project the code name ‘Futurama’. He determined it should be ready for launch by a mere four weeks after the project was announced to Amazon employees.
In order to meet the deadline, employees were moved from their regular teams and assigned to work on Futurama. It was a grueling process, with a good number of employees working as much as 120 hours a week in order to finish a project that many felt would not succeed.
Nowadays, Amazon Prime is almost as widespread as the air we breathe, but it wasn’t always that way. In fact, Amazon Prime has only been around for fifteen years. When compared to other giant US companies, such as Wells Fargo, which has been around since 1852. Amazon which officially launched in 1994 has progressed the e-commerce market space rapidly in the past 15 years with the launch of Prime.
Futurama was miraculously finished on time and renamed Amazon Prime by Jeff Bezos. Many of Prime’s first members were those who often paid $10 for the two-day shipping option alre
ady offered. As soon as it was launched, Amazon Prime permanently raised the bar for e-commerce forever, and many companies still have not figured out how to match the logistical feat of Prime.
In 2007, Amazon introduced Prime Student. This gave university students a year of Amazon Prime free of charge, which was later reduced to only six months. Prime Studio was founded in 2010, followed by the launch of Prime Video only a year later. These additional Prime services launched as a value add to sweeten the deal for Prime members.
By 2011, Amazon had built a total of 31 fulfillment centers across the US. Most of these centers were concentrated on the East Coast in Pennsylvania and neighboring states. By 2014, the number grew to 59 centers and 29 sortation and delivery stations. In 2015, the first-ever Prime Day happened, bringing Amazon the largest sales numbers in the company’s history. Since 2015 Prime day has continued to grow and in 2019 Prime day revenued over $7B.
The rapid growth and expansion of Amazon Prime has allowed the company to grow in both monetary value and physical size. In 2017, Jeff Bezos was named the richest man in the world. In 2018, Amazon had 151 Fulfillment centers, 119 Sortation Centers, 33 Grocery Facilities, and 53 Prime Now Hubs in the United States alone. Just last year, Amazon announced that their promise of two-day free shipping will soon become free one-day shipping.
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