Why Amazon is making free shipping harder to get
The company is pushing customers toward its Prime subscription. But is profit a motive here as well?
"Millions of Amazon customers have already made the choice of faster shipping by becoming Amazon Prime members," it says. "The service is so popular that more than a year ago we began shipping more items with Prime than with free shipping. Start your 30-day free trial today."
No one is asserting that Amazon is a flat-out bubble, but there is an increasingly noisy debate about when it will — or even whether it can — deliver the sort of bottom-line profits that investors normally demand from a company expected to post $75 billion in revenue this year. [The New York Times]
Amazon did not say why it made the change. However, Wall Street has focused on the company's high shipping costs in recent years and this may be a way to control such expenditure and boost the company's meager profits. [USA Today]
Life is complicated enough without having to amortize a membership fee across all purchases and then compare that to current competitor sales and standard pricing models. Just give me your best price including shipping.
Ultimately Amazon has to sell stuff, they have to be price competitive and service oriented. If they can get you to pay up front for shipping, they shift some of their competitive work on to you the customer. You have to make sure you buy from them even if what you’re buying might be cheaper (all cost considered) with a competitor.
I've spent thousands buying online, including Amazon. I won't pay for shipping unless the vendor's price PLUS shipping is lower than from a "free shipping" vendor.
Recently I've noticed some hardbound books and some DVDs (series sets) are being priced lower than at Amazon -- at my local (metro area) Costco. In the late 1990s I said that Amazon would probably have the greatest appeal to the comparatively rural consumer. Perhaps. But in any case, Amazon is losing its benefit to the price-conscious customer.
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