Amazon is raising the bar to receive free shipping for some customers, which is bound to grab the attention of online shoppers.
Check Out These Resources
- Do you need a business bank account for your online business? Take a look at our review of the five best bank accounts for sellers, some of which are free with no minimum balance or deposits. [sponsored]
- Boost your social media engagement with Publer. Learn how you can save time writing engaging content faster with AI. [sponsored]
- Could your online business use capital for growth? Here is a primer on revenue-based loans, and how they work.
This week, the company confirmed a change in its free shipping policy applicable to non-Prime members, who will see their free shipping threshold move from $25 to $35.
The adjustment is currently being tested in specific ZIP codes, and while the company claims this is still a test, it’s likely going to become the norm for all non-Prime customers in due course.
“We continually evaluate our offerings and make adjustments based on those assessments,” Amazon spokesperson Kristina Pressentin told several news outlets.
“We’re currently testing a $35 minimum for non-Prime customers to qualify for free shipping. Prime members continue to enjoy free delivery on over 300 million items, with tens of millions of items available for free Same or One-Day Delivery.”
For some online shoppers, the $139 annual fee for an Amazon Prime subscription outweighs its benefits, especially if they can secure free shipping by meeting the lower spending threshold.
However, with the bar now raised, many are likely to face challenges in meeting this new requirement. This change could potentially have effects on consumer behavior.
Will Amazon Buyers Switch to Other Retailers?
The change in policy might push more customers to reconsider signing up for Amazon Prime. The membership’s benefits, including free shipping and access to a vast array of streaming content, could prove to be a cost-effective alternative for regular Amazon shoppers.
However, there’s another side to this argument. For those who opt to remain non-Prime members, the new higher spending requirement could inadvertently encourage them to spend more per order to avoid shipping costs.
Some consumers may seek alternative solutions, including shopping at local retailers or Chinese-based direct-to-consumer marketplace competitors such as AliExpress or Temu. These marketplaces frequently offer similar non-brand name products available on Amazon, but at a lower cost and with a much lower free shipping threshold.
This shift comes at a time when financial constraints and depleted savings accounts are already concerns for many households, despite an easing of online inflation. The impact this may have on third-party marketplace sellers is unclear, but considering the huge Prime customer base, it likely will not be that impactful.
Subscribe to Our Newsletter
We do not sell your information.
You can unsubscribe at any time.
Head over to our Facebook Group for Small Business Marketplace Sellers and interact with us and other small business owners. Follow us on Facebook, Twitter, or LinkedIn to stay up to date with relevant news and business insights for your online business.