Amazon hasquietlyraised its minimum free shipping for non-Prime members from $35 to $49, according to anupdateon the company's website.
While increasing the free shipping threshold could entice some Amazon.com shoppers to pony up $99 for an Amazon Prime membership, it could also help the retailer increase average order values and mitigate the impact of fulfillment costs on profitability.
Fulfillment costs at Amazon.com surged nearly 33% to $4.5 billion in the fourth quarter and were a major headwind to reported profits which fell short of analysts’ lofty estimates.
For the full year, Amazon.com’s fulfillment costs increased 24.6% to $13.4 billion.
According to NBC, about 54 million of Amazon's 250 million-strong active customer base are Prime members. Prime membership offers free two-day shipping, along with other perks such as online music and video streaming. Since the average Prime member spends about twice as much a year as a non-member, Amazon is clearly positioning its Prime service as a more attractive option for shoppers.
Read more about Amazon's moves by clicking here.
