Dive Brief:
- Amazon is testing a $35 minimum order to qualify for free shipping with select non-Prime members, the company confirmed to Retail Dive. The free shipping minimum has previously been $25.
- The e-commerce giant is testing the free shipping threshold randomly by zip code-grouped regions.
- Prime membership costs $14.99 a month, or $139 annually.
Dive Insight:
Amid rising operational and delivery costs, Amazon is experimenting with threshold minimums for shipping.
“We continually evaluate our offerings and make adjustments based on those assessments,” an Amazon spokesperson said in an email to Retail Dive.
In its Q2 earnings call in early August, CEO Andy Jassy said the company is identifying ways to lower costs to serve its fulfillment network while focusing on fast delivery speeds for Prime customers. “We’re continuing to extend delivery to non-Prime customers as well,” he said.
Earlier in the year, the company completed a shift from a national fulfillment network to a regionalized model to reduce costs and increase delivery speeds.
The company has been changing the threshold for free delivery in other areas of operation as well. In January, Amazon Fresh quadrupled the amount Prime shoppers must spend on a grocery order to obtain free delivery. Previously, the company waived delivery fees on orders over $35, but then changed the minimum to $150.
“We’re introducing a service fee on some Amazon Fresh delivery orders to help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience,” an Amazon spokesperson said in an email at the time to sister publication Grocery Dive.
