Amazon Adds To Cost Of Not Becoming Prime Member

Amazon's another step to turn a large number of its customers into Prime members.

As Amazon seeks to increase the huge number of its loyal customers, the cost of not getting the Amazon Prime membership has just increased – at least for non-buyers of a large number of books published on dead trees.

The American e-commerce company increased the threshold to $49 for shipping free of charge for those who are not subscribers of Amazon prime. This represents a rise by $14 from the past $35. The change has already been made.

People who are fond of books might save some money, nevertheless as orders containing at least books worth $25 will be sold without being charged for shipping. Audio books on CD are also eligible.

The measure comes as the online retailer witnesses steep rises in the cost of selling merchandise to consumers. Last year, $5 billion were incurred in net delivery costs, a 19% increase from the earlier year and equivalent to around 5.1%.

Increasing the purchasing threshold is not too much concerned with delivery costs as it’s about nudging consumers to become a member of loyalty program ‘Prime’ whose members spend approximately twice than non-members. They are also paying a yearly fee of $99, which helps the Seattle-based company to earn billions of dollars in sales revenue.

In return, members of Prime get two-day shipping covered along with other benefits like music service, video streaming facility with exclusive offers and in some areas, they also get restaurant delivery service.

Now that consumers have to pay approximately $50 per order to avail shipping free of charge, Prime becomes a much more interesting and compelling offer, states CEO of Clarus Commerce, Tom Caporaso.

Clarus Commerce is an e-commerce enterprise focusing on logistics. Given that “right now it’s very much a land grab around e-commerce,” Amazon’s effort to attain the loyalty of even more consumers makes sense, Clarus states.

The electronic trading platform does not reveal the number of Prime members but it states that its members increased by 47% in the United States in 2015. That crossed even a 35% growth estimate given by the Consumer Intelligence Research Partners, which estimated 54 million members of Prime.

This may be another element to the strategy of the retail giant. The more the members of Prime are, the larger the incentive for outside merchants for paying Amazon for handling logistics with the help of the Fulfillment by Amazon (FBA) program.

FBA sellers are eligible to provide their consumers with the same Prime delivery perk, which the company is offering for its own products. The number of FBA subscribers increased by over half in the last year.