Amazon increases threshold for free shipping

Amazon increases threshold for free shipping

Amazon has raised the requirements for free delivery in the United States, from 35 to 49 dollars. It hopes this move will entice more Americans to subscribe to its Prime subscription.

Prime customers are more loyal and buy more

Amazon used to provide free shipping for orders starting at 35 dollars, but it will change that now. Only orders starting at 49 dollars will get free shipping, with books being the sole exception, as its threshold is 25 dollars. 

 

The world's largest internet department store wants to lure more Americans towards its Prime delivery subscription. For 99 dollars per year, Amazon will ship things for free within 2 days, while the service also provides "video on demand" and other extras. 

 

It is an increasingly successful service as its worldwide subscriptions have grown 51 % in 2015 (up 47 % in the United States alone). Amazon does not reveal actual numbers, but analysts believe Prime has 60 to 80 million subscribers. Previously, Amazon inferred that Prime subscribers are more loyal customers and that they order more than non-subscribers. 

 

Lower bill for shipping costs

Jeff Bezos' company also hopes this move will help lower its huge shipping bill, running up nearly 11.5 billion dollars (nearly 10.5 billion euro) worldwide last year. That is 11.6 % of the company's total turnover, while it only gets 6.5 billion dollars (so far) from Fulfillment by Amazon and Amazon Prime, which leaves 5 billion dollars as a cost

 

It is not the first time Amazon bumped up the free delivery threshold. Back in 2013, it went from 25 to 35 dollars.