Future Challenges
Although online shopping has become popular over the years, Amazon had to struggle to make profits. One of the reasons was the variable costs incurred by multiple delivery attempts and reverse logistics-the return of products by the customers. Multiple delivery attempts cost the company about 20-30 percent of the total costs for home deliveries.
This was due to the additional shipping charges which had to be borne by the company. Several incidents of thefts and product damage were reported as the shipped goods were at times left at the customer's doorstep. All these incidents also led to a lot of frustration among customers. The expenses on reverse logistics and multiple delivery attempts ate into Amazon's profits and hence it had to find a solution to this problem...