Prime Now is Amazon's 2-hour delivery service offered to its Prime members. For an additional $7.99, Prime members can get select items delivered within an hour.
If this sounds like magic, you're not alone. According to a story by Bloomberg's Devin Leonard, Amazon executives were so impressed by Prime Now's quick delivery that they once lobbed the idea of calling it "Amazon Magic" instead:
"Some company executives joked that the service should be called Amazon Magic; they went with Prime Now."
Amazon seems intent on putting even more resources in Prime Now. The company spent $11.5 billion on shipping last year, and it keeps growing at roughly 40% year-over-year every quarter. On top of that, Amazon has been making a number of moves that signal it may be planning to build its own delivery network akin to that of FedEx or UPS, although the company denies it.
Prime Now is offered in over 40 cities and makes 25,000-plus products across 25 categories available for the 1-hour delivery. It also does a 1-hour restaurant delivery for free in some cities like New York, San Francisco, and Los Angeles.
That may be putting a lot of pressure on logistics incumbents like FedEx. According to the Bloomberg story, FedEx and other last-mile delivery companies are publicly shrugging off Amazon's delivery ambitions as non-material, but are "less confident in private."
