Amazon may be trying to push customers into prime memberships

Before you go, we thought you'd like these...
Before you go close icon

Amazon Expanding 'On-Demand' Delivery Service

Why would Amazon risk ticking off customers with higher barriers for shipping? Because it wants more Prime members.

People hate paying for shipping. One of the ways Amazon used that to its advantage was by introducing aggressive free shipping benefits. Spend $25 with products coming from Amazon and you'd get shipping for free -- a great deal, even if you did have to wait longer. Then it increased the needed total to $35. That was a big increase, but still good.

And then the minimum jumped to $49 an order, unless you're buying just books, in which case it's still $25.

According to DealNews, consumers are not happy with the change. The deals site surveyed 1,360 people, 67 percent of whom didn't have Prime memberships.

View the best selling items on Amazon in February:

Most popular items on Amazon (February)
See Gallery
Amazon may be trying to push customers into prime memberships

No. 1 best seller in Albums:

25 by Adele, $11.88

No. 1 best seller in Toys and Games: 

Cards Against Humanity, $25

No. 2 best seller in Toys and Games:

Hasbro Pie Face Game, $17.77

No. 1 best seller in Beauty:

Dead Sea Mud Mask, $14.95

No. 2 best seller in Beauty:

Gillette Fusion ProGlide Manual Men's Razor Blade Refills, $24.22

No. 1 best seller in Books:

Harry Potter and the Cursed Child , Parts I & II, $17.99

No. 2 best seller in Books: 

Cravings: Recipes for All the Food You Want to Eat, $17.99

No. 3 best seller in Books:

First 100 Words, $3.36

No. 1 best seller in Electronics: 

Fire, 7" Display, Wi-Fi, 8 GB, $49.99

No. 2 best seller in Electronics:

Amazon Fire TV Stick, $39.99

No. 3 best seller in Electronics: 

Amazon Echo, $179.99

No. 1 best seller in Make Up:

Wunderbrow Eyebrow Make Up, $22.00

No. 1 best seller in Appliances:

Water Filter, Smartwater Compatible Cartridge, $16.99


The survey results said that 97 percent of the people who did not have Prime would stick to larger orders only because they didn't want to get dinged for the shipping charges. Just over half (52 percent) said they'd shop elsewhere as much as possible on principle.

On the surface, Amazon seems to have made a major mistake. But dig in a bit and the move might seem like a smart one.

Prime is very important to Amazon. With 54 million U.S. members at $99 a year (although some percentage are likely student or other special pricing), as Consumer Intelligence Research Partners estimates, Prime translates into billions of annual revenue. Because Amazon is so tight on specific information, it's impossible to know how profitable the set of services is. But $99 a year is $8.25 a month. That includes video and audio streaming as well as second day shipping.

However, Prime isn't like Netflix. It doesn't have to make money on every aspect. If it does, that is great. If not, it must at least cement customers to the side of Momma Amazon so that they don't stray. According to CIRP, Prime members spend an average of $1,100 a year with Amazon, compared to $600 for non-members. That is a pretty compelling reason for the company to keep the program, especially after the price jump to $99 from $79 a couple of years ago.

Now the jump in free shipping minimums begins to make sense. Yes, people are upset. With Amazon's massive amount of data on its customers, particularly after the earlier Prime program price jump, management likely has a good idea of how many people will really be turned off, how many are dependent on the company, and the percentage that is likely to convert into Prime members. Amazon's most recent earnings release indicated that paid Prime memberships were up 47 percent in the U.S. and 51 percent globally. That's after the price hike.

People will get angry. Most won't put in the time and energy to find the same products over the number of different retailers they're likely to need for replacement sources. The result is likely to be even more Prime members. That's more cash coming in, possibly more margin, and plenty more purchases that further lock out competitors. Sometimes you have to let customers get mad and then get over it so you can improve the top and bottom lines.

RELATED: Strange Amazon items that were featured on 'Amazon Prime Day'

Strange items that were available on Amazon Prime Day
See Gallery
Amazon may be trying to push customers into prime memberships

Body Back Buddy & Body Back Buddy Mini Self Massage Tool Duo: Trigger Point Relief

About the product:

  • Two of the best self massage tools available
  • Easily work on tight, difficult to reach muscles
  • Relieve spasms, tight muscles, trigger points and pressure points
  • Stimulates circulation to promote healing
  • Recommended by doctors, chiropractors, physical therapists and massage therapists

Buy now!

Chef Works CHAT Chef Hat, White

About the product: Chef Works traditional chef hat with Velcro closure in the back. Available in black and white.

Buy here now!

Beard Growther (Grow Your Beard Fast)

About the product:

  • Grow Your Beard Super Fast
  • All Natural Oils
  • Made in the USA
  • Conditioning Topical Rub
  • Beard Farmer Backs Growther 100%

Buy now!

Cinnamon Imperials Candy RED HOTS - 5 Lb.

About the product:

  • 5 LB Resealable Bag, Approximately 5,500 pieces
  • Fat Free, Made in USA
  • Spicy, Cinnamon Flavored, Red Hot Hard Candy
  • 1/4" in Diameter
  • Great for Holiday Baking

Buy now!


About the product:

  • ADJUSTABLE TO FIT MOST SIZED WRISTS. Attractive twisted rope design. Comes packed in velvet pouch. Makes a nice gift.
  • RARE EARTH MAGNETS FOR MAXIMUM THERAPEUTIC MAGNETIC EFFECT. This bracelet contains 6 High Strength Rare Earth Therapeutic Magnets which have been specially embedded into the bracelet for protection, delivering over 12,000 Gauss in Magnetic Power. The Magnets are positioned near the wrist joint and tendons for maximum therapeutic effect.

Buy now!

24" Inch Extra Long Handled Shoehorn

About the product:

  • Made From Pro High Tech Plastic Providing Sturdy and Long Term Usage
  • Easy Grip Handle (Entire Palm Grip) - Great for Seniors with Assisted Mobility Issues

Buy now!

Dog Baskerville Ultra Muzzle

About the product:

  • This lightweight muzzle features a basket design that gives all-around protection
  • It also allows unrestricted panting and drinking
  • Safety strapping ensures the muzzle will always remain securely in place and features two additional points of secure attachment

Buy now!


More from
3 Branding Tips From the Top 10 Viral Videos of 2015
7 Secrets to Finding More Time in a Day
Gratitude Physically Changes Your Brain, New Study Says

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading