It’s not that we don’t like surprises. In fact, if you look closely at what we do here, we’re looking for them every day, in the form of money saving offers in a variety of formats, some of which we didn’t expect. But we have to admit that this one rattled us just a bit.
For some time now, Amazon has truly dominated online shopping, and one big reason for this dominance is shipping. They are known for shipping quickly, for packing their items well so that they arrive at their destination (that would be you and me) safely.
With their Prime Membership, shipping is even better. Most items ship not only free of charge, but typically arrive at your door within 2 days. In face, I’ve used their service and received products in just over one day. You get the picture. They’ve always done shipping right, and in our opinion their high quality, usually flawless shipping system is a big reason why they have so much success.
That’s why we were so surprised to find that they had increased their minimum free shipping threshold to $49. We were finding deals there on Saturday morning, and noticed that the “magic number” had changed.
There was no press conference we know of, no announcement of the change at the site. In one day, the amount just went up by a hefty $14. This marked difference from the previous increase from $25 to $35 (we had a great deal of advance notice from Amazon) was beyond understandable. Retail analysts had predicted it for quite some time before the change was even announced. That made this one quite a surprise.
The reasoning for this jump? As is often the case with ANY decision at the company, it’s all about Amazon Prime. The membership offers them consistent revenue via membership “dues.” At the moment you get quite a bit for $99, including a full year of 2 day shipping along with access to music, video and apps, many of them for free.
When you sign up for that service, you typically spend more. The decision to pull the trigger on a purchase becomes practically automatic when you don’t have to consider purchasing 2 of that item, or adding other items to your cart, to get your new things shipped for free.
That decision is now more clear. We’re betting this is all about the cost of doing business in the form of lowering shipping costs for the world’s biggest online store. To sum it all up, we think they’re making a strong move to increase the number of shoppers willing to sign up for Prime.
What does all of this mean for you? Clearly, if you’re already insterest in shopping at Amazon regularly, the decision is now quite delineated in detailed fashion: Pay one price for yearly free shipping, or spend almost $50 to get that.
How all of this affects Amazon’s bottom line is up for debate. They’re banking on significantly more revenue from more Prime sign ups that will result from this shipping minimum change. And while that remains to be seen, it’s important to note that the debate was rather hot the last time they did this as well.