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

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.