Cost of Amazon Prime to rise.
2014 Feb 11th 13:03 PM
The cost of
Amazon`s Prime shipping is about to go up. This was the information that came
from Amazon executives last week who said that shipping costs would make them
increase the price of the company`s popular delivery membership. Currently
Amazon Prime is £49.00 a year but the cost could potentially go up by £12 to
£24 pounds which would be quite a steep increase.
Amazon Prime
began in 2005 as a premium option to "Super Saver Shipping" which
until a few months ago was offered free for any purchase but this was altered
to a minimum order of £10.00. This allowed Super Saver delivery to boost sales
in two ways; customers would buy more than they at first planned to meet the
free shipping mark and cutting shipping from the final price of the order
eliminated one of the reasons people still prefer shopping in actual stores.
Prime is £49
for a year`s membership, the benefits that members receive is a limitless Free
One-Day delivery and access to the Amazon Kindle library. Members appreciate
the speed and reliability of the service and some say that it encourages consumers
to spend more as they want to maximise the benefits of the membership . Amazon
has never revealed how many people are members of the Prime service other than
a general "tens of millions". However the company did claim that they
had more than one million new Prime sign-ups during the third week of December
alone.
Researchers
estimate that Prime members spend almost as much as twice as much on Amazon per
year as non Prime members do. This in turn feeds Amazon`s "virtuous
cycle". "When customers spent more, Amazon`s volumes increased,
so it could lower shipping costs and negotiate new deals with vendors."
Stone writes. "That saved the company money, which would help pay for
Prime and lead back to lower prices."
This rise in
price may not bother devoted Prime members who have had the service for a
number of years. It is unlikely that customers who are now used to the free one
day shipping will be bothered about an increase if they buy frequently on Amazon.
However new Prime users may be more disgruntled and not bother to renew their
membership as they have yet to become accustomed to the service.
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