shopping

Amazon announces ten-dollar increase to free-shipping minimum

Amazon raised its free shipping minimum on Tuesday from $25 to $35. You won’t find this change telegraphed on the main page next to the Kindle. In fact, it’s kind of hard to find at all.

But it’s there, hidden in the depths. “Amazon’s minimum order size for free shipping has changed to $35. This is the first time in more than a decade that Amazon has altered the minimum order for free shipping in the U.S.,” says the succinct page the company put up to announce the decision.

Ten dollars is not necessarily a huge increase, and $35 for free shipping is still a much better deal than most specialty sites. Best Buy is offering free shipping when you buy $25 worth of merchandise but the offer has many exclusions—read the fine print carefully.

SteelSeries only occasionally runs promotions for free shipping, Razer’s free shipping minimum is $125, and many of the smallest sites won’t do free shipping—like, to my dismay, this fantastic maple syrup company.

Still, look around the Internet and it’s easy to find people upset with the change—deal sites seem particularly up in arms.

Onward and upward: Amazon Prime

Amazon’s in a bit of a tough position. The site is so synonymous with deals, even a small price raise is hard to swallow. For a company with as much business as Amazon, however, the loss it takes on free shipping across all those transactions must be sizeable.

Coincidentally, this change comes the day after a story by David Streitfeld at the New York Times about Amazon’s lack of profitability. So far, that hasn’t mattered to investors. Amazon provides cheaper products, cheap shipping, and world-class customer service and thus builds revenue and consumer goodwill.

“To make a significant profit, though, some or all of those variables will have to change, which might alienate customers and slow down that roaring revenue growth,” writes Streitfeld.

Today’s increased free shipping minimum may be one of those variables. It’s easy to see Amazon’s motivations—they’re spelled out right on the page that announced the change.

Amazon Prime.

“Millions of Amazon customers have already made the choice of faster shipping by becoming Amazon Prime members. Prime includes unlimited Free Two-Day Shipping, with no minimum order size, on more than 15 million items,” it says, right under the price increase. “The service is so popular that more than a year ago we began shipping more items with Prime than with free shipping.”

Amazon then prompts you to sign up for a free thirty-day trial of Prime.

With the holiday shopping season right around the corner it makes sense for Amazon to try and get people to sign up for its Prime service, which costs $79 a year. It helps Amazon recoup the cost of free shipping and (since Prime is also Amazon’s movie-streaming subscription service) boosts its numbers as a Netflix competitor.

Will that plan work or not? Well, that’s a different question.

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