Amazon.com Inc. (NASDAQ: AMZN) has dropped its free shipping minimum to $25. The former minimum was $35. The delivery time for the new service runs between five and eight days.
The matrix of Amazon free shipping programs is complex and depends not more than just the order amount. Members of Amazon’s Prime shopping and streaming video plan get free shipping on almost all orders. A Prime subscription costs $10.99 a month, and its free shipping plans come in several tiers. For 50 million items, the basic Prime program offers free shipping in two days. This service carries no minimum order. Amazon also offers Prime members free shipping within two hours in some cities as part of a service called Prime Now. Amazon offers free same-day delivery for millions of other items. The e-commerce giant has a number of restrictions on free shipping, based on the time of day items are ordered, and also on rules for Saturday and Sunday in some parts of the country
Free shipping programs are a major tactic in the war for e-commerce customers. Wal-Mart Stores Inc. (NYSE WMT), Amazon’s primary e-commerce rival in the United States, offers free shipping for orders over $35. The time period for delivery is two days. And the Wal-Mart program does not require people who use it to be members of any of Wal-Mart’s credit card plans or shipping plans. Additionally, Wal-Mart has free shipping for some items not included in its shipping program. These appear to be selected by Wal-Mart management based on some formula not available to customers. These items get delivered in three to five days. Because Wal-Mart has a network of over 4,100 stores, it offers discounts to people who don’t use free shipping. These customers have to order online and pick up their items at a Wal-Mart location.
Free shipping is also available from virtually every large retailer in the United States. For the most part, these plans offer the free program for orders of more than $35. Most promise delivery in two days. All have qualifications for which products are included.
Free shipping tactics have become a major part of retail competition for online customers. Retailers often change free shipping charges, as well as the number and type of products included. The news of Amazon’s $25 minimum is another salvo in the free shipping wars. It is left to its competition to decide whether it is worth matching in order to keep or draw customers.