Amazon is experimenting with increasing the free shipping minimum to $35 for non-Prime members in certain markets, aiming to reduce costs. This adjustment won’t affect Prime subscribers. CEO Andy Jassy’s cost-cutting measures include workforce reduction and delivery fee changes. The potential shift could encourage more sign-ups for Prime’s two-day delivery and streaming perks, with over 200 million subscribers reported in 2021, contributing around $9.9 billion to revenue. Amazon has adjusted this threshold previously, and Walmart also maintains a $35 minimum for non-members.
According to notices posted on its website, Amazon has started a change to its free delivery rules for non-Prime members in several areas, requiring a minimum purchase of $35. As a means of cutting costs, Amazon has made this move.
Historically, the minimum purchase amount for attaining free shipping stood at $25. However, this modification will not impact Prime subscribers, who continue to enjoy the benefit of free shipping and additional services for their annual fee of $139.
Amazon spokesperson Kristina Pressentin confirmed the testing of the $35 threshold for non-Prime members. She stated, “We consistently assess our offerings and make adaptations based on these evaluations. Prime members retain the privilege of complimentary delivery for a vast array of over 300 million items, including tens of millions eligible for free same-day or one-day delivery.”
Initial observations of this test were documented by Ecommercebytes, a newsletter dedicated to e-commerce trends.
Given decelerating sales and an unpredictable economic climate, Amazon’s CEO Andy Jassy has embarked on a comprehensive review of the company’s expenditures. To address these challenges, Amazon undertook measures such as workforce reduction by 27,000 positions, suspension of corporate hiring, and discontinuation or postponement of various experimental initiatives. The company also implemented delivery fees for Fresh grocery orders below $150 and introduced charges for specific returns at UPS stores.
This modification to the free shipping threshold has the potential to incentivize more customers to enroll in Amazon’s Prime membership program, which encompasses benefits like complimentary two-day delivery, access to streaming services, and other perks. As of 2021, Amazon reported a global Prime subscriber base exceeding 200 million. Subscription-based services, including Prime memberships, contributed approximately $9.9 billion in revenue, as disclosed in Amazon’s latest quarterly financial report.
Amazon has previously made adjustments to the free shipping minimum for non-Prime members. In 2016, the threshold was raised from $35 to $49, but it was later reverted to the original amount a year later. Subsequently, Amazon reduced the minimum to $25 in a bid to compete with Walmart.
Walmart also maintains a $35 minimum for free shipping applicable to shoppers who are not enrolled in its loyalty program, Walmart+.