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Amazon raises free shipping minimum: Now $49

Amazon increased its free shipping minimum by 40%, and Amazon Prime users are mainly affected by the raise. The free shipping minimum has increased from $35 to $49. The increase in price makes Prime users to easily justify the offered $99 per year, and $49 for students, which they paid for a two-day shipping, including a same-day delivery for free in a suitable area code. 

In addition, it allows customers to access Prime Video, including Prime Music, Prime Photos, Prime Pantry, Prime Early Access, the Kindle Owners’ Lending Library and Amazon Family discounts. In 2013, Amazon made an increased on the free shipping minimum to $35 from $25, however, free shipping minimum for books remained at $25.       

According to the updated free shipping customer service page of Amazon, “Orders including $25 or more of eligible books qualify for FREE Shipping. All orders of $49 or more of eligible items across any product category also qualify for FREE Shipping,” In addition, “With free shipping, your order will be delivered 5-8 business days after all of your items are available to ship, including pre-order items.”


Reasons to raise the free shipping minimum

The anticipated reasons of Amazon raising its free shipping is because it aims to boost its Prime subscriber base size, as the delivery costs of their products are massively growing. An analyst at Forbes announced that Amazon’s Prime membership has expanded by about 51% in the previous year, which posted lower compared to an increase of 53% in 2014. 

In other news, the net shipping costs of Amazon exceeded $5 billion for the full year. Meanwhile, the $1.85 billion, mainly came from the holiday quarter. The $1.85 billion cost is rooted in the difference between the gross shipping costs worth $4.17 billion, which was paid to UPS, including FedEx, the U.S. Postal Service against the collected shipping revenue from customers with a value of $2.33 billion.  

Amazon posted a $35.75 billion net sales for the quarter ended on December 31st, which was up by 21.9% from $29.32 billion in the same quarter prior year. However, analysts are expecting the company to post a net sales of $35.93 billion.

The giant online retail aims to build its own proprietary shipping, including its operations in delivery to improve its delivery partners as well as offset its increasing costs of shipping. In turn, Amazon will be able to control well its supply chain from factories to end users’ homes.   


Amazon Prime user statistics

Numbers of subscribers of Amazon Prime are currently unknown. On the other hand, the Amazon Prime currently has about 54 million members in the U.S. which spends about an average of $1,100 per year, compared to the non-members which accounts about $600 per year, according to the Consumer Intelligence Research Partners (CIRP).   

As per December year-end, the CIRP forecasted about 47% of Amazon customers. It suggests that the Amazon Prime is generating revenue in a range of $4 and $6 billion per year for the Seattle-based retail giant. The Amazon Prime is more likely to significantly expand in the current year as it has raised its free shipping minimum. 

As the Amazon raises free shipping minimum, tons of investors will likely watch out for signals about this company stock. You too can earn bigger profits and execute better trades here at Trade12 by reading the latest market updates on our official website, Striving to become the best forex broker for you, Trade12 reviews daily market events essential to your trading activities to help you develop a keen understanding of what is forex and certain trends involving stocks, currencies, indices, commodities, and metals. With all the positive Trade12 feedback from clients, you will be assured that your trading account is safe and secured.

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