Amazon Free Shipping Threshold Hike Sure to Bolster Prime Membership

In a move surely designed to boost the already burgeoning rolls of Prime membership, Amazon has announced a change to its free shipping policy, raising the order threshold for the service to $49 for those without a $99 per year Prime subscription. The threshold had been orders of $35 or more.

The minimum order value for free shipping from Amazon was last increased in 2013, from $25 to $35.

So now in effect you’ll pay half the cost of a Prime membership in a single order that qualifies for free shipping in 5-8 business days. This makes the math tilt more heavily in favor of signing up for the content-and-perk-rich program, which has an estimated 54 million members in the U.S. alone, as of January.

As before, the exemption in the policy is for book orders, where it all started for Amazon 20 years ago, for which the free shipping threshold is orders of $25 or more.

Considering how it incentivizes yet more Prime membership, the move makes perfect sense for Amazon. In addition, it means additional shipping revenue, helping the company cut into the $5 billion expense line for 2015. In the fourth quarter, the company’s fulfillment and shipping costs increased 33%, more than double the 15% increase in product sales.

This move to bolster Prime and shipping revenue is happening in parallel to Amazon’s ongoing logistics and delivery ambitions both here and abroad, as the company looks to own both sides of the ecommerce street.

Mike O’Brien is Senior Editor of Multichannel Merchant

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