When will Amazon start charging "prime members" for shipping?
- Thread starter GON
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Yup, and the way they get around it is by selling bundles, so they won't sell you 1 soap with free shipping, but they'll happily sell you a package of 5 soaps with free shipping.
I know you know this but there are add'l "benefits" of being a Prime member. Personally, we use none of them except for occasional Amazon Prime Video usage.
No, Walmart will start charging for shipping. They might hold off for a little bit but they'll eventually come around. All of the major players in every industry do this: wireless service, cable TV, airlines, etc. One of them starts charging for something (carry-on bag), the others eventually do the same; charge for converter boxes, others follow suit.
No worries about free shipping going away for prime members. They'll just increase the cost for prime membership when it comes time for the annual renewal. Losing customers won't concern them either, the increase will cover the small % of people canceling the service.
Amazon made more money in the last year then they have ever ... so why change the model and potentially lose tons of customers. Walmart and others have similar models, and if Amazon gets even more greedy it could really backfire on them. Prime membership covers a lot more than just free fast shipping. I'm sure there are lots of members that don't get the full RIO, and others that get way more out of it all based on how much stuff they buy and how much use they make out of the other perks of Prime membership.
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While this is generally true, let's differentiate between revenue and profits (operating income) though. Amazon's retail business generates a ton of revenue, but not a whole lot in terms of income. On the other hand, their AWS business is only 12% of their revenue yet it accounts for almost 60% of their entire income.
So, yes, Amazon is going to have to figure out a way to make their retail business more profitable by either increasing markup on products they sell (either products themselves or membership fees) or by finding ways to keep their costs down. I could only imagine that shipping is a big component of these costs and they'll have to find ways to slash that, probably through automation.
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I always find it curious when the term ‘it’ll never happen’ and Amazon appear in the same sentence.
In a sense, they already are. Over the past year or so their pricing has gone from reliably good/great to average at best. I was looking at grabbing a raspberry pi 4 board and no one on amazon sells it for less that $10-15 more than other online stores. That's just one example but it seems very common for me. Couple that with their heavy promotion of sub-par chinese goods has really caused a great reduction in the purchases I make.
It was always claimed that they lost money on their online sales but made big bucks on AWS. I suspect they've profited quite well now.
It was always claimed that they lost money on their online sales but made big bucks on AWS. I suspect they've profited quite well now.
^This. And, if I need something quickly, I'll go out and buy it vs waiting for shipping. I have no need to pay for Prime.
Thanks for starting this thread... It reminded me that I need to cancel my Prime Membership. I accidentally clicked the wrong button while checking out a few weeks ago and got the "free" month of Prime.
They don't lose money on retail sales, but they make a lot more on AWS.
Prime is more than about just free shipping. I had a trial period for Prime back before they had a lot of video, and I bought something like a $6 book with free shipping and without having to pool a $25-35 order. And it was at most 2nd day when a lot of their non-Prime free shipping orders back then might have been up to a week.
But as others stated, AWS is where they make most of their money now. They theoretically lose money on the membership, but it builds brand loyalty and is includes a lot of prestige projects that keeps the brand in people's minds.
They've already done that by building their own shipping infrastructure and using less of FedEx, UPS, and USPS. Reminds me of how Costco has saved money on hot dogs and rotisserie chickens by actually making hot dogs in-house and buying their own chicken farms.
gathermewool
Site Donor 2023
Subscribe and Save + Amazon Chase card FTW.
Prime will never charge shipping. Membership prices will climb or the cost will be baked into the purchase price. Id bet on it.
Prime will never charge shipping. Membership prices will climb or the cost will be baked into the purchase price. Id bet on it.
PA is considering passing legislation to charge an additional fee for packages delivered from Amazon, FedEx, and UPS. Their argument is that the added numbers of delivery vehicles on the roads is causing the roads to degrade faster. So, their solution is to charge a "package tax" of $0.25 per package to help offset the "damage" being done to the roads by delivery vehicles. Considering there were 800,000,000 packages delivered in PA last year, that would give the state another $200M in the coffers to squander spend to benefit residents.
All of Amazon's departments rely heavily on AWS to run their business and are charged for their use of AWS services... so in a way some of the lack of profitability reported by some Amazon business units are an accounting trick. On paper AWS skims profits away from all their other units.
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gathermewool
Site Donor 2023
Said vehicles don’t use gas or diesel, huh???
Right, but I'm talking about the next step: automation through self driving vehicles and drones.
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