Wednesday 24 July 2013

Amazon - end of the free lunches?

Today’s news that Amazon has scrapped free delivery for orders of less than £10 will come of no surprise to regular users. Indeed many will have progressed  to Prime level, where for £49 per annum, all orders have free delivery. Prime members don’t only contribute a £49 fee, they’re also Amazon’s most loyal, high-spending customers, with some analysts claiming subscribers spend $1,224 every year compared to the casual user’s $505.

Today’s free-delivery restriction will no doubt cause many of the regular, non-Prime users to sign up for the free-delivery service..

That leaves current small-time users and new users.
  • New users will ‘never’ know that free delivery existed, and may be attracted by the Amazon convenience, anyway
  • Current small time users may be a casualty of the new restrictions, but they should expect a couple of retrieval/trade-up moves from Mr Bezos...
Finally, Amazon takes a step towards meeting City needs for profitability in line with sales.

A win-win-win for all…without missing a beat…
Competitors beware… 

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