Amazon Launches ‘Prime Air’ Drone Delivery Service — Will Members Save Money?

Flying delivery drone transferring parcel box from distribution warehouse to automotive garage customer service repair center background.
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Amazon announced that it would launch its first drone delivery service -Prime Air- in Lockeford, California, later this year, after it receives permission from the Federal Aviation Administration (FAA) and local officials.

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“The promise of drone delivery has often felt like science fiction. We’ve been working for almost a decade to make it a reality,” Amazon said in a statement on its website.

“The challenge: How do you get items to customers quickly, cost-effectively, and–most importantly–safely, in less than an hour? And how do you do it in a way that can scale? It’s relatively easy to use existing technology to fly a light payload a short distance that’s within your line of sight, but it’s a very different challenge to build a network that can deliver to customers across large communities,” the company added.

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Prime Air is one of only three drone-delivery companies that has gone through the process to earn an FAA air carrier certificate, the company said.

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The deliveries, which Amazon expects to be free of charge for subscribers of its Prime customers, will deliver from 32 locations by 2025, according to internal documents, according to Charged Retail.

Prime Air will cost $63 per package in 2025, according to internal projections viewed by Business Insider, Charged Retail said. In comparison, the estimated cost of sending a package for Amazon is around $4.50 to $5.50 per package when shipping through third-party delivery partners, it added, citing a report by Wells Fargo.

Amazon’s announcement comes on the heels of Walmart’s. Last month, the company announced the expansion of its drone delivery services to 34 sites by the end of the year, potentially reaching 4 million US households across six states.

“Between the hours of 8:00 a.m. and 8:00 p.m., customers will be able to order from tens of thousands of eligible items, such as Tylenol, diapers and hot dog buns, for delivery by air in as little as 30 minutes,” David Guggina, senior vice president of innovation and automation, Walmart U.S., said in a May 24 blog post. “For a delivery fee of $3.99, customers can order items totaling up to 10 pounds, so simply put, if it fits safely it flies.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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