EcommerceBytes-NewsFlash, Number 2878 - August 27, 2012     4 of 4

Amazon Announces Success of Its Prime Free Shipping Program

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Amazon announced it now ships more items with Prime Free Two-Day Shipping than with its Free Super Saver Shipping program. The Prime program costs customers $79/year and in return, they receive free 2-day shipping on most Amazon-fulfilled orders.

Amazon is notorious for not releasing details about its sales and operations, and in true Amazon-fashion, it did not reveal exactly how many orders are sent via Prime in Monday's announcement. In its last quarterly earnings report, Amazon.com revealed that third-party sellers accounted for 40% of unit items sold, the highest percentage ever recorded.

The FBA (Fulfillment By Amazon) program is helping fuel these numbers - inventory sent to Amazon warehouses by third-party sellers for the company to fulfill on their behalf qualify for Prime shipping. The FBA program helps Amazon ensure that third-party orders are valid and are sent out quickly, and the program helps it provide a broader selection of inventory than it could on its own.

Amazon launched the Free Super Saver Shipping program in 2002, which offers free shipping on orders over $25.

Not all Amazon inventory qualifies for Prime Shipping. Amazon offers "Add-on" items - "thousands of low-priced items that would be cost-prohibitive to ship on their own" - such as a single light bulb. Add-on items ship with orders that include $25 or more of items shipped by Amazon - the $25 minimum applies to Prime program members as well.

Amazon founder and CEO Jeff Bezos said in a statement:

"Since Amazon launched in 1995, we've been focused on growing selection for our customers. Following the introduction of Amazon Prime in 2005, we've worked hard to grow Prime selection as well. We're incredibly proud to be able to offer more than 15 million Prime items today. We've also grown the Prime Instant Video library to more than 22,000 movies and TV episodes, all with unlimited streaming, and Prime members can borrow more than 180,000 books for free, with no due dates, using the Kindle Owners' Lending Library that's up from roughly 5,000 when the program launched less than a year ago. Even seven years later, the price of Prime remains unchanged at $79 a year. Amazon Prime is the best bargain in the history of shopping, and it's going to keep getting better."


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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