Amazon is currently experimenting with a revision to its free shipping policy. Customers who are not enrolled in the Prime loyalty program will now have to make a minimum purchase of $35 to qualify for free shipping, instead of the previous requirement of $25. This development arises as Amazon seeks to reduce expenses and streamline its operational processes.
GLOAmazon is currently experimenting with a revision to its free shipping policy. Customers who are not enrolled in the Prime loyalty program will now have to make a minimum purchase of $35 to qualify for free shipping, instead of the previous requirement of $25. This development arises as Amazon seeks to reduce expenses and streamline its operational processes, as reported by CNBC on August 28th.
Previously, non-Prime members were obliged to spend $25 for free shipping. Under the updated policy, these customers must now spend a minimum of $35 to avail themselves of free shipping. On the other hand, Prime members, who pay an annual fee of $139, will remain unaffected by this change and will continue to enjoy free shipping privileges.
Amazon spokesperson Kristina Pressentin provided insight into this adjustment, stating, “We continually evaluate our offerings and make adjustments based on those assessments. We’re currently testing a $35 minimum for non-Prime customers to qualify for free shipping. Prime members continue to enjoy free delivery.”
This alteration to the free shipping threshold could potentially serve as an incentive for more customers to subscribe to the Prime membership program, according to the CNBC report. Prime membership not only encompasses complimentary two-day shipping but also provides access to streaming services and additional perks.
Research by PYMNTS indicated that free shipping stands as the primary driver for consumers to join Amazon Prime. A total of 84% of Amazon Shoppers with Prime memberships cited this as a motivating factor, as revealed in the report titled “Walmart+ Weekend: Prime Rival or Trip to the Grocery Store?”
In 2021, Amazon disclosed a global Prime subscriber count exceeding 200 million. Subscription services, including Prime memberships, generated approximately $9.9 billion in revenue, according to information from the retailer’s most recent quarterly earnings report mentioned in the CNBC article.
Amazon has previously made adjustments to the free shipping threshold for non-Prime members. In 2016, the minimum purchase requirement was raised to $49 from $35, only to be reversed back to the original threshold the following year. The minimum was subsequently lowered to $25 as part of an initiative to compete with Walmart, which also maintained a $35 minimum for free shipping for customers not enrolled in loyalty programs.
This change to the minimum for free shipping is part of a more comprehensive cost assessment conducted by Amazon’s CEO, Andy Jassy, as outlined in the report. The company has implemented several cost-cutting measures, encompassing workforce reductions, hiring freezes, and the introduction of delivery fees for Fresh grocery orders under $150.
Source: PYMNTS
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