When will Amazon start charging "prime members" for shipping?

[GON]

When will Amazon start charging "Prime Members" for shipping?

We all know the business model. Get everyone hooked, eliminate the competition, and then start to charge for something previously provided for free or part of a membership.

Hit me- Amazon will likely start to charge "Prime Members" for shipping. IMO not if- but when.

 

[Hermann]

They will lose a healthy percentage of their prime customers. Me included. Might as well fire up the truck and go to Wal Mart.

 

[paulri]

They don't need to. They get increased sales from prime members, so they make up their losses (extra shipping plus extra video content) from their increased revenues.

Two quotes I found when I was looking up the antitrust argument against them a few months back:

Robbie Schwietzer, a former Vice-President of the Prime division, said "In all my years here, I don't remember anything that has been as successful at getting customers to shop in new product lines." Another former member of the Prime staff said "It was never about the 79 dollars. It was really about changing people's mentality so they wouldn't shop anywhere else." (FWIW, 79 bucks was the original cost of prime subscription)

 

[GON]

They will lose a healthy percentage of their prime customers. Me included. Might as well fire up the truck and go to Wal Mart.

Looking at the airline industry after consolidation, the big three airlines all copied the lead of any one when the started to charge for a item once provided as part of the ticket. Seat selection, luggage, etc.... all use to be "free" on the three major airlines. They are now sources of additional revenue for the airlines. Charging Amazon Prime Members for shipping is a future source of supplemental revenue I suspect Amazon leadership is planning for.


I would see Wal-Mart joining Amazon for shipping charges.

 

[GON]

They don't need to. They get increased sales from prime members, so they make up their losses (extra shipping plus extra video content) from their increased revenues.

Two quotes I found when I was looking up the antitrust argument against them a few months back:

Robbie Schwietzer, a former Vice-President of the Prime division, said "In all my years here, I don't remember anything that has been as successful at getting customers to shop in new product lines." Another former member of the Prime staff said "It was never about the 79 dollars. It was really about changing people's mentality so they wouldn't shop anywhere else." (FWIW, 79 bucks was the original cost of prime subscription)

You are right they don't need to. But I think likely will.

Fifteen years ago Amazon often had the lowest prices of anyone. Not any longer- people are hooked on Amazon and Amazon knows it all so well.

 

[Zee09]

Whatever they do has consequences.
Now is not the time for anybody to rock the boat.

 

[Bottom_Feeder]

It'll never happen. Free shipping is the core perk of Prime membership. Take that away and people will quit in droves.

 

[GON]

Amazon's growth and acquisition model is based on their ability to borrow money, typically via bonds, at super low interest rates, almost free money.

Inflation appears likely, AMZN labor costs appear to rise more than their model- to get money for near free AMZN must be able to show more revenue AND more gross and net income. Charging Prime Members for shipping solves the likely loss of net profit due to rising labor costs.

Speculation only....

 

[PandaBear]

What is prime membership for if it is not for shipping?

You obviously don't know how Amazon makes money. Prime is like a Costco membership so it "encourages" you to come and shop there by removing your what if concern, this is also how the US large retailers' return policy of 90 days largely come from (no risk if you don't like it). Change it and people will be more careful about buying and you lose a huge chunk of your revenue.

Biggest reason Amazon thrive is how they treat their employees. On the salary side they basically layoff 5% of their bottom employee every year and hire new ones based on performance. They pay 1/4 of their pay in stocks that will vest mostly 3-4 years out but they sort of guarantee 15% growth in stock price annually (so far they have been exceeding it), and they count stock growth as your salary increase. So, you end up with a lot of people being overworked but a pile of money 3 years out to be vested, and if you are just resting and vesting at work they lay you off before you vest your stock. p.s. since you are paying long term capital gain this scheme lower your overall tax by a little, and many hold on to the stock so it artificially boost stock price, leads to a cycle.

They don't pay the worst but they are not the best either, their non warehouse workers rely on a large pool of people to join and be fired, like a filter slowly catching the good stuff and let out the rest. This is why their HQ need to be in a large job hub with other companies instead of the middle of nowhere like Intel, or pay people to move to one single location like Apple.

Everyone has free shipping if you spend $35 and above btw, for Amazon it is $25. These days there are a lot of small items they just won't ship unless you buy at least that much, I can see this grow to $35 or $40 eventually but I don't think Prime will exclude free shipping, ever.

 

[Jimmy_Russells]

Will never happen. Free shipping is absolutely massive to internet sales, so much so that people don't even pay attention half the time and pay more for an item with free shipping than the same item at a lower price + shipping cost which is still cheaper.

If necessary they would increase the cost of the Prime membership, or just build the shipping cost into the items, which they already do.

 

[GON]

What is prime membership for if it is not for shipping?

Free video... priority order fulfillment.. who knows.

I am sure the public relation gurus' at AMZN will have a way to spin it.

 

[GON]

Will never happen. Free shipping is absolutely massive to internet sales, so much so that people don't even pay attention half the time and pay more for an item with free shipping than the same item at a lower price + shipping cost which is still cheaper.

If necessary they would increase the cost of the Prime membership, or just build the shipping cost into the items, which they already do.

Quite possibly But supplemental shipping charges for "Prime Members" seems like really low hanging fruit for a massive increase in revenue with very little effort.

 

[BMW Dom]

The other day: I ordered some things from amazon - I don't have prime. They arrived in 2 days. I see no reason for me to buy Prime.

 

[BISCUT]

Whatever they do has consequences.
Now is not the time for anybody to rock the boat.

This! If they charge prime members for shipping Walmart wins! Don't forget, The Walton's are the richest people in the world, not Bezos. Walton's wealth is spread amongst multiple families. Bezos isn't.

 

[GON]

Funny the timing of this thread.

I'm at sitting in the Admirals Club at DCA airport. Some big cheese from a very major cable company is sitting almost next to me with his phone on speaker. He is talking with his home office and said they are going to start charging either 19.99, 29.99, or 39.99 for something the provide for free. They just said 39.99 was too high, but they will go with 29.99, and said subscribers will now get free pc scans and pc support , and a bunch of other worthless stuff to deflect from the new 29.99 charge.

 

[PandaBear]

Free video... priority order fulfillment.. who knows.

I am sure the public relation gurus' at AMZN will have a way to spin it.

Their free videos are largely junk, worse than the $2 Black Friday Hulu deal. Why priority order from Amazon when everywhere else have the same speed for no membership fee?

Let's be honest, Amazon Prime is no Costco if you take away the free shipping.

 

[PandaBear]

Funny the timing of this thread.

I'm at sitting in the Admirals Club at DCA airport. Some big cheese from a very major cable company is sitting almost next to me with his phone on speaker. He is talking with his home office and said they are going to start charging either 19.99, 29.99, or 39.99 for something the provide for free. They just said 39.99 was too high, but they will go with 29.99, and said subscribers will now get free pc scans and pc support , and a bunch of other worthless stuff to deflect from the new 29.99 charge.

This is why 5G home internet can't come fast enough. After my company paid internet for work from home is over I'm leaving Comcast and going back to ATT VDSL / fiber to the block internet. 75mbps is good enough for me and $30 cheaper.

 

[Quattro Pete]

When will Amazon start charging "Prime Members" for shipping?

Instead of doing that, they will just keep increasing the Prime Membership annual fee, like they've been doing in years past. It used to be $79. Now it's $119.

Another way they can control what gets shipped for free is to make certain products on their website not eligible for Prime shipping - this way you'll have to pay shipping even if you are a Prime member. There are a boat load of products currently on their website that are not eligible for Prime shipping.

 

[GON]

Their free videos are largely junk, worse than the $2 Black Friday Hulu deal. Why priority order from Amazon when everywhere else have the same speed for no membership fee?

Let's be honest, Amazon Prime is no Costco if you take away the free shipping.

Amazon Prime Video use to be mostly free programming if my memory serves me. Now seems Amazon prime video charges for many shows.

Everyday Amazon likely processes millions of orders that another vendor is selling under like terms for less. Why, many people don't want the hassle of shopping around, opening a new account, etc.....

 

[JustN89]

Instead of doing that, they will just keep increasing the Prime Membership annual fee, like they've been doing in years past.

Another way they can control what gets shipped for free is to make certain products on their website not eligible for Prime shipping - this way you'll have to pay shipping even if you are a Prime member. There are a boat load of products currently on their website that are not eligible for Prime shipping.

Exactly this. They already have charged for shipping through increased membership fees.