You place a $30 order at Amazon and discover that you are no longer eligible for free shipping. Annoying, right? Well, Amazon is indeed experimenting with a new minimum order value for free shipping for select non-Prime members. The company has raised the minimum threshold from $25 to $35.
This change has taken place in randomly selected postal code regions and is one of many changes Amazon is considering in light of rising operational and shipping costs. A Prime membership, which still offers free shipping, costs $14.99 a month or $139 a year.
But why is this important for businesses and organizations? This new threshold could affect consumer buying behavior and change Amazon's competitive position against other e-commerce platforms. Companies using the Amazon platform may have to make adjustments in their pricing strategy or promotional approach to remain attractive to customers.
Earlier this year, Amazon migrated to a regional fulfillment model to reduce costs and speed up delivery speeds. Amazon CEO Andy Jassy indicated in a Q2 earnings call that the company is continuously looking for ways to reduce costs for its fulfillment network. In addition, Amazon had already raised the minimum order value for free delivery through Amazon Fresh in January.
So what are the solutions? For consumers, it might mean attractive Prime memberships. For businesses, it may mean revising their shipping strategy, especially if they also sell their products on Amazon.