Amazon sinks $4 billion to catch up with Walmart

The online giant is already known for fast shipping, but this move takes things up a notch.

May 4, 2025 - 12:45

Amazon sinks $4 billion to catch up with Walmart

Fast shipping is something customers have come to expect from Amazon. But sometimes, the online retail giant outdoes itself.

If you've ever placed an order on Amazon only to have it show up at your doorstep two hours later, you're not alone in that experience. That’s because Amazon has long prioritized expedient shipping as a means of drawing in customers.

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Granted, the site's massive selection of inventory and competitive prices help as well.

But Amazon doesn't always have the lowest prices online. In certain categories, like groceries, it often loses to competitors like Walmart.

Still, customers are willing to pay a bit more on Amazon for the promise that their orders will arrive quickly. When you need something in a rush, spending an extra dollar for expedited delivery can be a no-brainer.

Amazon shares big delivery update.
Image source: PATRICK T. FALLON/AFP via Getty Images

Amazon has struggled to reach rural areas

If you were to ask Amazon which customers are the hardest to reach with deliveries, the company would probably point to two very distinct groups of people — consumers in large, densely packed cities, and consumers in rural areas.

Cities are a challenge for Amazon not because of distance, but because of traffic and a general lack of space.

It's not an easy thing to fit an Amazon delivery truck down a crowded city street. And in areas where doing a drop-off means double parking, it can be downright stressful for drivers.

Rural areas pose another challenge. By nature, rural deliveries require drivers to spend more time on the road, making these orders less cost-effective for Amazon.

Customers in rural areas suffer, too, as their remote location means they're less likely to benefit from the speedy deliveries for which Amazon is known.

Amazon is expanding its delivery network

Amazon is aware that it needs to do a better job of serving its rural customers. The company just announced plans to triple its network of distribution centers in rural parts of the country to get deliveries to customers faster.

Specifically, Amazon intends to invest $4 billion to reach an additional 200 delivery outposts in the country's least populated areas by the end of 2026. It's a move that could not only improve access to Amazon deliveries, but also create an astounding 100,000 jobs.

"Amazon is adding same-day delivery sites and adding additional robotics and automation throughout our buildings," CEO Andy Jassy said during the company's most recent earnings call. "You'll also see us expand the number of delivery stations that we have in rural areas of the U.S. so we can get items to people who live in less densely populated areas much more quickly."

Jassy was also quick to note that the company is investing in automation in an attempt to keep costs as low as possible in the face of tariffs and general economic uncertainty.

Amazon reported $155.7 billion in revenue for its most recent fiscal quarter. That was a 9% increase year over year.

The company reported earnings days after Amazon denied reports of potential plans to start highlighting the cost of tariff increases on its site.

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Amazon has said repeatedly that it plans to do everything it can to shield its customers from the impact of tariffs.

“There's never been a more important time in recent memory than trying to keep prices low, which we're heads down, pretty maniacally focused on, and then get things to people quickly," said Jassy.

Maurie Backman owns shares of Amazon.