Amazon"s Prime membership may start to look a bit more appealing going forward. After bumping the yearly cost for Prime from $79 or $99 last year, the online retailer has announced that it"s going to increase its minimum spending amount per order for free shipping.
The price jumps from the previous $35 minimum that was set by the company back in 2013 to $49 - a 40% jump. Prior to the price jump in 2013, the minimum order amount to qualify for free shipping was $25. The price jump can be attributed primarily to the increase in shipping costs, which Amazon says increased 37% in last year"s Q4 earnings report. The new $49 price puts Amazon"s free shipping spending qualification in line with major retailers like Wal-Mart and Target.
While the rising costs to get products to customers is likely the driving force behind the free shipping threshold increase, it"s also possible that Amazon is trying to encourage shoppers to buy into its Prime service. Constantly ordering beneath the new threshold would quickly cost you as much or more than a yearly Prime membership, creating a natural selling point for shoppers. Even though Amazon may not recoup as much in costs from frequent buyers, the company still saves on marketing since Prime members are very likely to re-up on their memberships year after year.
The announcement did carry a brief moment of good news for book readers. While the price jump for free shipping will escalate to $49, book orders can still qualify for free shipping at $25 in certain circumstances. Amazon isn"t detailing those circumstances at this time.
Source: Amazon, via Wall Street Journal