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Amazon Raises its Free Shipping Threshold: what it Means for Amazon Shoppers & Everyone Else

Last updated by on 11 Comments

Last week, Amazon raised it’s free Super Saver shipping threshold from $25 to $35. The previous $25 minimum order to qualify for free shipping was in place for more than a decade.

For those who buy a lot of their goods on Amazon, who don’t have an Amazon Prime membership, it’s big news.

Actually, since Amazon set the low bar for free shipping in the the e-commerce industry, if you buy anywhere online, it’s big news. Many other retailers followed Amazon’s trend of setting lower free shipping thresholds, and will certainly follow this trend of a higher one.

Why would Amazon make this move when a large part of its rise in popularity was due to the low threshold that had made it famous?

Three reasons:

  1. amazon free shippingAmazon lost $3 billion in shipping costs in 2012. Although it’s hard to feel sorry for them – tis the price for building ridiculous market share dominance. Alas, shareholders don’t like it.
  2. Amazon wants to push more of its members to Amazon Prime – with its $79.95 annual subscription price – a high margin service offering for the company that locks customer loyalty.
  3. Amazon has won the market. You don’t make this profit-bearing move unless you are completely confident you own the market. Just like Google with search and YouTube with online video, it’s over. Game. Set. Match.

On point #2, in its statement on the website, Amazon plugs its Prime service.

“Millions of Amazon customers have already made the choice of faster shipping by becoming Amazon Prime members. Prime includes unlimited Free Two-Day Shipping, with no minimum order size, on more than 15 million items, as well as unlimited streaming of over 41,000 movies and TV episodes through Prime Instant Video and access to over 350,000 books to borrow through the Kindle Owners’ Lending Library. The service is so popular that more than a year ago we began shipping more items with Prime than with free shipping.”

I had previously signed up for a free 30-day trial of Amazon Prime in order to ship something that I would have otherwise had to pay for.

I wouldn’t call myself an “Amazon power user”, but if I am going to buy something I would have a difficult time finding locally, it usually is my first destination (and often results in the lowest price).

However, very few (if any) purchases are “urgent” enough for me to simply not exercise a little patience until I have enough items to hit the free shipping threshold. Raising the threshold from $25 to $35 won’t change that. And that’s a lesson best learned by every reader here – patience is a virtue – and that’s very true when it comes to free shipping thresholds.

This is a bit of a concerning signal from the company if you’re not on the Prime bandwagon. It’s a start of a trend that shareholders will probably love. $50 is next, and then who knows… If you’re not already a Prime member, the company wants to ensure you become one.

And even for those who are, this is a bit concerning. Once you’re locked in to Prime, how many price increases will you stick around for?

Amazon Shipping Discussion:

  • Were you upset or indifferent to the Amazon free shipping price increase? Why?
  • Are you an Amazon Prime member? Why or why not?
  • Has or will this increase push you to Amazon Prime? If not, what free shipping threshold would?

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11 Comments »
  • garrett says:

    also note that inflation alone could account for the increase from when the $25 minimum was first introduced.

  • Heather says:

    I have prime, but i am still paying the student price of 35 (I think) once that goes up I will reconsider, but keep in mind prime also offers a netflix like service, and a free borrowed book each month.

    • Matt says:

      Will the extra $40 really be that big of a difference spread out over an entire year?

    • Gary says:

      I too am a prime student member, and have had it for a couple of years now. I definitely use amazon as my first stop for shopping mostly because I’m lazy. The great thing is, that it turns out to be cheapest! Aside from produce, I almost always get what I need from amazon with a little research on the side to make sure prime is still where the money’s at. I know I have saved way more than the prime membership costs even at regular price, so I will not quit my membership until they start to raise THAT price… there is a threshold for me there, and although I don’t care to guess at it right now, I know I would drop the membership soon after they start pushing it.

  • Matt says:

    Prime is the best deal out there and has more than paid for itself several dozen times over. No one beats there prices on anything and I am winning so many times over that $80 a year for the videos and free 2 day shipping is very worth it. Some things are worth paying for!

  • This Life On Purpose says:

    I don’t buy from Amazon often but when I do I like to take advantage of the free shipping, and I’ll usually buy something else to reach it. It’s usually cheaper than paying for the shipping, but this price bump may affect that. I’ll end up having to pay for shipping or even just find an alternative to ordering through Amazon. I doubt I’ll ever have the prime membership.

  • Ron Ablang says:

    I don’t know if I’ll ever buy the Prime membership either. Because we’re locked in to a low price for Comcast 3mbit speeds, we probably wouldn’t enjoy streaming movies. I certainly don’t shop Amazon often enough to do Prime. So for my family it hurts Amazon more to increase the minimum shipping amount as I would have to hunt harder (if i really wanted something) to add to $35+…

    • Amanda M. says:

      This is a comment to your internet speed and streaming. My internet speed is a solid 1.5 mbps and I stream both Netflix and Hulu with no interruptions and less than 5 seconds of buffer before the video starts. Your families experience may differ because I am only one person, so there’s only one “stream” happening, but you could probably do it. If you didn’t want to pay to test it, you can always use the Hulu free service to watch the last few episodes of most network’s shows (which is what I use).

  • Jeremy says:

    There is almost nothing you can’t find on Amazon. Next time you find yourself a few bucks short of the free shipping threshold just grab stuff you would grab on your next trip to the grocery store. Toilet paper, trash bags, and granola all qualify towards the free shipping threshold.

  • Kim says:

    I’m a prime member, and I have been for two years. I’m also a mother of a toddler and have another on the way. If you have Amazon Prime and Amazon Mom (free program), you get 20% off of diapers through subscribe and save. I have found that the combination of these programs have saved me quite a bit of money. Plus there is the added convenience of not dragging a toddler into Target!

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