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Amazon Free Shipping minimum is now $49

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Re: Amazon Free Shipping minimum is now $49

#2

Post by tristanj »

One look at their finances and it's clear why they're doing this. According to their SEC filings, last year Amazon brought in $6.5 billion in shipping revenue [1], and spent $11.5 billion on shipping costs. Take those numbers together and they lost $5.0 billion subsidizing shipping. They lose more money on shipping every year than most startups make in a decade. It's a huge cost on their budget, not hard to see why management is trying to cut costs.

[1] Includes some revenue earned from Amazon Prime memberships; excludes shipping revenue of third-party sellers not under the Fulfilled by Amazon program

Data is from page 26 of their 10-K, linked below

https://www.sec.gov/Archives/edgar/data/1018724/000101872416...

Re: Amazon Free Shipping minimum is now $49

#4

Post by dangrossman »

"Profit was held back by a big jump in fulfillment costs, which increased 32.8% year-over-year in the fourth quarter and nearly 25% for the full year. Amazon spent $4.55 billion in the fourth quarter to fulfill customers’ orders, up from $3.4 billion in the same quarter a year ago, and the increase cannot be explained away by increases in Amazon sales, as the percentage of revenues spent on shipping also increased, from 11.6% to 12.7%." [1]

"There is more than loyalty at stake for Atlanta-based UPS. This year, its Amazon account exceeds $1 billion. ... The average cost to handle a parcel was about $8 last year." [2]

"Some analysts say the move could help position Amazon to offer shipping services to other companies, eventually competing with the likes of United Parcel Service and DHL Worldwide Express. ... Amazon rolled out thousands of its own trailers and launched an Uber-like delivery service last year to handle the so-called last mile of delivery, taking packages from distribution centers to customers' homes." [3]

1: http://www.marketwatch.com/mw2/palm/marketwatch/story.asp?gu...

2: http://www.nasdaq.com/article/amazon-seeks-to-ease-ties-with...

3: http://www.nbcnews.com/tech/tech-news/amazon-drops-hints-it-...

Re: Amazon Free Shipping minimum is now $49

#5

Post by envy2 »

Seems like Prime shipping is still free on orders of any size, with a $35 requirement for free same-day shipping when applicable.

I'd be curious how many Amazon customers actually don't use Prime and will thus actually be impacted by this—seems like pretty much everyone I know has a subscription.

Re: Amazon Free Shipping minimum is now $49

#7

Post by kdamken »

They are really trying to force you into signing up for prime, aren't they?

I cancelled my prime subscription at the start of the year. Some thoughts:

- I buy less stuff on impulse. Since the price limit is (or was) $35 for free shipping, I usually have to wait until there are enough things I really want/need before ordering.

- The pricing is often better other places. Normally Amazon's non prime price will be comparable, but then shipping fees will be like 7 or 8 bucks, while other places have cheaper, faster, or even free shipping.

- If you do have prime, not everything with prime has free shipping. For small things they have "add on items", which don't ship to you until you have $25 worth of stuff in your cart. It wasn't always like this, and it was a big negative for me. I had signed up for prime because I didn't want to pay for quick shipping. Now I had to wait until there were other things I needed to hit their arbitrary number.

I ran the numbers over my three year subscription period with them and it turned out I wasn't buying enough stuff to make the math work. Maybe when it was $79, but at the current price it's just not worth it.

It's like they're going out of their way to piss off customers.

Re: Amazon Free Shipping minimum is now $49

#9

Post by deftnerd »

This is just assuming that they'll even let you order $49 worth of items in one box.

I let my Amazon Prime lapse because I was rarely using it.

A few weeks ago I decided to do a bulk order. I ordered 18 items with a total of $110. They split my shipment into three packages of approximately $50, $50, and one item by itself in another box for $10. Since one of the boxes didn't have $35, they tried to charge me shipping.

I simply removed that item but instead of having two $50 boxes, the shopping cart removed an item from a box and put it into a box by itself to ensure that I had to pay shipping. I spent two hours adding and removing items to discover that there is no way to get free shipping for multiple items anymore.

Eventually I contacted customer service and they said they would take care of it and ship it in one box with no shipping cost.

Three weeks later and my order finally shipped, in 5 boxes, with 5 shipping fees charged to my card.

Re: Amazon Free Shipping minimum is now $49

#10

Post by wfunction »

deftnerd wrote: post #9

This is just assuming that they'll even let you order $49 worth of items in one box. I let my Amazon Prime lapse because I was rarely using it. A few weeks ago I decided to do a bulk order. I ordered 18 items with a total of $110. They split my shipment into three packages of approximately $50, $50, and one item by itself in another box for $10. Since one of the boxes didn't have $35, they tried to charge me shipping…

This is pretty epic. Did you call them back and demand a refund?
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