Amazon recently announced that it would partner with the US Postal Service to commence Sunday deliveries on November 17 in New York and Los Angeles. The retailer also noted that it would roll out the plan in most parts of the US in 2014, including New Orleans, Dallas, Phoenix, and Houston. “We’re excited that every day is an Amazon delivery day,” said Amazon’s vice president of worldwide operations and customer service, Dave Clark, in a Monday press release.

Win-Win Opportunity

The real headline in the partnership between Amazon and the US Postal service is the win-win opportunity it presents. The US Postal Service is deep in red territory, having reported losses for seven consecutive quarters amid the ongoing shift to email and Internet-based means of communication. The agency is expected to make yet another loss this year, with internal projections coming in at $6 billion. Partnering with a bigwig like Amazon will hopefully plug the cash drain and correct the worrying trend.

Amazon on the other hand, is getting closer to its goal of offering deliveries on the same day, as well as all through the week. This greatly enhances flexibility for the consumer; something that Amazon expects will fuel growth going forward.

Where does the investor come in all of this?

Fresh Chapter In The Growth Narrative

As we discussed in one of our previous articles, Amazon’s allure is not its bottom line but rather the great capital gains it gives investors on the stock market. If anything, the company is a loss making machine, as signaled by its $41 million loss in the third quarter. In the past, it has been in an out of the red, for the most part in, having made its last profit in mid 2010. Incidentally, its shares have been up 150% since its last profit in 2010. This is a testament to investors’ blatant disregard for the bottom line and more notably, undisguised slant toward top line growth.

Sunday Deliveries Open Up A New Chapter In The Growth Narrative And More Importantly, Promise Investors Greater Gains In The Stock Market

Through partnering with the US Postal Service for Sunday deliveries, Amazon builds on its former efforts in a unique way. Previously, Amazon’s overhauls have been achieved through in-house solutions. For instance, it has built its own warehouses for same-day deliveries in metropolitan areas in Texas, Tennessee, New Jersey, and Virginia. It is also using its own trucks for same-day delivery in Seattle and Los Angeles. Back in 2012, the retailer even went to the extent of acquiring Kiva Systems, a maker of robots that move items around in warehouses, for $775 million. However this time, Amazon is warming up to business process outsourcing in a bid to share the costs and risks with the US Postal Service. This approach should reduce costs as well as step up efficiency.

Takeaway

The most puzzling thing about investing is the non-linear relationship between variables. Although Sunday deliveries are just a small part of the puzzle, they will be greatly instrumental in steering Amazon toward its goals and more importantly, fuelling rallies on the stock market.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.