Has Amazon Hit the Tipping Point?
In consumer news, an impressive statistic has surfaced from mega-retailer Amazon (NAS: AMZN) : More items are shipped using Amazon's Prime service than using its free Super Saver Shipping feature.
While at first blush this may not seem that meaningful, the implications are large. Amazon Prime is a membership service, and investors should never underestimate the value of recurring revenue and the sticky customers that membership brings.
Not only that, but the average purchase for Amazon Prime members is $49.23, well above the minimum of $25 that consumers must spend for the Super Saver Shipping service. This indicates a conscious decision to opt for Amazon Prime instead of Super Saver Shipping in many cases. In return, consumers are rewarded with streamed movies, a feature that competes with Netflix (NAS: NFLX) , and plants a firm standing within the Internet industry as a whole.
The article Has Amazon Hit the Tipping Point? originally appeared on Fool.com.Austin Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com and Netflix. Motley Fool newsletter services recommend Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.