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Amazon Raises Threshold for Free Shipping

Amazon.com tightened the requirements for one of its most popular shipping methods Tuesday morning. The change is to Super Saver Shipping, which for a over a decade mailed items free as long as the order met a $25 threshold. The new threshold: $35. Amazon gave no reason for the change. Super Saver Shipping was in many ways Amazon’s best deal for people who were occasional-to-regular shoppers but did not need emergency orders of diapers. Why buy something for $20 and pay a few dollars shipping if you could buy two things and get them mailed for free? When Super Saver Shipping began, it was an innovation. It helped spark the movement to cheap or free shipping by all online retailers, and cemented Amazon’s reputation as a cutthroat competitor. Here is the positive way to spin this announcement: This will tempt more customers to the Prime shipping service, which charges $79 a year for unlimited two-day delivery. It is thus a brilliant move by Amazon, which wants everyone to be Prime so they will buy more and more and keep raising revenue. Here is the negative way: This is the biggest rollback of benefits for Amazon’s customers ever. Amazon incessantly talks about how it is doing more for its customers; this goes in the other direction. Customers will notice. “I would often order two CDs to get the free shipping, but now that isn’t going to happen,” said Ariel Grostern of Washington. Here is the really negative way: Amazon is under stress. Paulo Santos, a widely read short-seller on the Seeking Alpha financial site, published a post after the news with the headline, “Amazon.com Shipping Change Means The Earnings Miss Is Probably Massive.” Mr. Santos quoted from Amazon’s financial documents, where the company stresses, “We believe that offering low prices to our customers is fundamental to our future success, and one way we offer lower prices is through shipping offers.” “What Amazon.com is doing is backtracking on this central tenet,” Mr. Santos wrote. “It would not do so lightly.” The final spin: It will take more than this to dent investors’ optimism. Amazon shares rose after the news broke. An Amazon spokesman had no comment.

http%3A//bits.blogs.nytimes.com/2013/10/22/amazon-tightens-shipping-requirements/%3F_r%3D0


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