How Amazon Same-day Delivery Works

Like many things that sound too good to be true, there are certain rules and restrictions for Amazon's same-day delivery. They're pretty simple, though, so once you learn the basics you could start getting those smile-stamped boxes at your front door in no time.

Here's how it works. Order an item that qualifies for Amazon same-day delivery before noon, and it will arrive at your home by 9 p.m. Order it after noon and you'll get it the next day. The service is even available seven days a week (except in Boston, where there's no Saturday delivery), but don't expect it to be available on Thanksgiving Day, Christmas Day or New Year's Day. Other holidays and major shopping days will mean limited availability too.

You'd think that kind of speed would be expensive, but it's really not. If you have an Amazon Prime membership ($99 per year), same-day delivery is $5.99 for orders under $35, but if you spend more than that, it's actually free. Without a membership, you can still take advantage of this fast shipping option, but it will cost a bit more — $8.99 plus $0.99 per item.

So what's the catch? For one, Amazon same-day delivery is available on only about a million items. While that may sound like a lot, it's actually just a tiny fraction of the estimated 253 million products for sale in the company's massive online store [source: Grey]. It even pales in comparison to the 20 million items currently eligible for free two-day shipping through Amazon Prime.

Same-day delivery is also limited to customers living in just 14 metropolitan areas: Seattle, San Francisco, Los Angeles, San Diego, Phoenix, Dallas, Indianapolis, Tampa Bay, Atlanta, Washington, D.C., Baltimore, Philadelphia, New York City and Boston. Including suburbs, that's about 500 total cities [source: Chang]. Enter your zip code here to see whether you're eligible; if you're not, you'll just have to wait for those packages the old-fashioned way.

Imagine the complicated logistics it takes to receive an online order, pull the product, package it, put it on a truck and ship it to the customer, all within a nine-hour time frame. It's a feat that seems nearly impossible, and since Amazon's figured out how to do it, they aren't too keen on divulging their secrets to competitors. That's why they've been very tight-lipped about how exactly they're able to make same-day delivery happen.

Here's what we do know. Amazon stores its inventory and prepares orders for delivery in massive warehouses known as fulfillment centers. "Massive" might even be an understatement: The company's Phoenix fulfillment center, for example, employs 1,500 workers and occupies an unbelievable 1.2 million square feet [source: Wohlsen]. They are the picture of efficiency: A computer tracks each item as it's delivered, unloaded onto a conveyor belt and shelved. When a customer places an orderl, employees known as pickers receive an alert telling them what to retrieve and where. They place the item in a bin, which, once filled, is sent on a conveyor belt to the packaging area. There the items are boxed and sent out for same-day delivery, although Amazon isn't saying exactly who operates its trucks.

In just four years between 2011 and 2015, Amazon added 50 of these warehouses, bringing the total to 109 worldwide [source: Chang]. That means Amazon can quickly ship orders just about anywhere, especially in metro areas where fulfillment centers are strategically located in close proximity to millions of people. That short transit time is a crucial part of the company's same-day delivery service.

Amazon is also pretty quiet about the financial details of same-day delivery, but many observers believe they're taking a loss — for now. As the service becomes more popular, the money will start rolling in, especially with few companies in a real position to compete with them [source: Alba].

Just because same-day delivery is difficult doesn't mean other companies aren't trying to do it as well. Another online powerhouse, Google, is giving it a shot, as are brick-and-mortar stores like Wal-Mart. There's also a whole host of independent delivery services that act as a middleman between retailers and the customer. Like Amazon, all still have pretty limited delivery areas and product selection but are hoping to expand in the future.

Google's same-day delivery service is called Google Express. Customers order online through the Google Express website, and unlike Amazon, they choose a four-hour window for the items to be delivered. If there's too much demand for a certain time frame, it won't be available. Because Google isn't an online retailer, it fulfills orders through local retailers, which means available stores and inventory vary depending on location. Right now, those locations include, Manhattan, Chicago, Boston and Washington, D.C., West Los Angeles and much of the area from San Francisco to San Jose. The cost? Google Express members pay $95 per year or $10 per month for free same-day or overnight delivery on orders $15 and over; shipping is $3 for orders under $15. Non-members pay $4.99 for orders over $15 and $7.99 if the total is less than that cost [source: Google].

With lagging sales in recent years, Wal-Mart is also trying to boost its online popularity with same-day delivery. The company's service, known as "Wal-Mart Grocery," takes advantage of their pre-existing network of "warehouses" in the form of more than 5,200 stores nationwide — although, for now, it's available only in San Jose, Denver, Phoenix, Huntsville (Alabama), and Bentonville (Arkansas) [source: Wal-Mart]. Customers order online, and, as with Google Express, items are delivered during a specific time frame. There is no membership fee; rather, prices are determined by the time slot the customer chooses [source: Wal-Mart Grocery].

Many other third-party companies are popping up to make same-day deliveries on behalf of stores. They utilize on-demand couriers, moving packages from the store to a customer's home in the same way Uber and Lyft provide transportation for people. Instacart, for example, has an online store in which customers can purchase items, and an independent "personal shopper" will retrieve and deliver them [source: Instacart]. Other services, like Deliv, simply partner with retailers to add a same-day delivery option to the store's existing website. Contract drivers then deliver the purchase to the customer [source: Deliv].

Same-day delivery is called the "holy grail" of Internet retail — and for good reason. If a company like Amazon could figure out how to offer a huge selection and ship orders anywhere in a matter of hours at a low cost, they could very well put brick-and-mortar stores out of business.

Many companies have crashed and burned on the quest for same-day delivery. Take Kozmo.com, for instance. Founded in 1998, the company promised to deliver customers in six markets anything they wanted to their front door in an hour or less. But with no minimum order, people were buying candy bars that cost far less than the actual cost of delivery. When they tried to implement a delivery fee, customers revolted, and soon Kozmo went belly up in one of the biggest busts of the dot-com bubble [source: Stahl].

That's the challenge Amazon faced when they first tested same-day delivery in 2009: How to deliver orders quickly without going broke. Perhaps wary because of past debacles, they started off slowly, offering the service in just seven cities and charging a $6 fee for Prime members and $15 for non-members [source: Stone]. By 2014 customers were really embracing the service, ordering 10 times as many items with same-day delivery that year over the previous one [source: Chang]. It was likely that level of success that led to the free option introduced in 14 cities in May 2015.

What's next for Amazon same-day delivery? Certainly they will be looking to expand the service as competition from rival retailers increases. They're also experimenting with services like Prime Now that could shorten delivery time to an hour — something they're already doing in Manhattan, Brooklyn, Miami and Baltimore [source: Amazon Prime Now]. And then, of course, there's the famous Prime Air, which proposes to deliver packages in 30 minutes or less using drones [source: Prime Air]. That's still awaiting regulatory approval from the Federal Aviation Administration, though. Until then, we'll have to wait at least an hour for Amazon orders, or, heaven forbid, two whole days.