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 receiving 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 nearly 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, securely, 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 in large communities.”

Prime Air is one of only three drone delivery companies to have gone through the process to obtain an air carrier certificate from the FAA, the company said.

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

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

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 American homes in six states.

“Between 8:00 am and 8:00 pm, customers will be able to order tens of thousands of eligible items, including Tylenol, diapers and hot dog buns, for air delivery in as little as 30 minutes. David Guggina, Walmart US senior vice president of innovation and automation, said in a May 24 blog post. “For a $3.99 shipping fee, customers can order items totaling up to 10 pounds, so if it just fits securely, it flies.”

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About the Author

Yael Bizouati-Kennedy is a full-time financial journalist who has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a VP/Senior Content Writer for major New York-based financial firms, including New York Life and MSCI. Yael she now freelances and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. She (CRC Press, April 2020) She has two master’s degrees, one in journalism from New York University and one in Russian studies from Université Toulouse-Jean Jaurès, France.