Does Amazon Prime Really Reduce Expenses?

When a website as big as Amazon creates a new service, people notice. Just about every English Literature professor scoffed at the release of the Kindle, and many others declared they would never read books on a screen, but eBooks are now outselling their paper equivalents by a huge margin. From book sales to video streaming, Amazon has made a name for itself in ingenuity and attracted the loyalties of millions of American shoppers. So when the e-commerce mogul announced a new shipping feature, people instantly signed up, but it’s unclear whether Amazon Prime will reduce expenses.

For $79 a year, Amazon Prime members received unlimited free two-day shipping, and one-day shipping for $3.99 on “all eligible items.” Members get a few other services, but that qualifier at the end is important. For frequent buyers on Amazon, the deal sounds great; closer inspection, though, reveals that regular shoppers will hardly reduce expenses on shipping they would have otherwise paid.

“All eligible items” is the same constraint that Amazon puts on its “free shipments on orders over $25” deal. Only a few used items are ever eligible—or “fulfilled by Amazon” as their tag will say—and items from every other retailer on the site will retain their standard shipping fees. A large portion of Amazon shoppers only uses it as a giant garage sale, taking advantage of the cheap used books, movies, and CDs that other individuals sell. For them, Amazon Prime can’t help. And for those who buy Amazon’s new products, the free shipments on orders over $25 deal usually applies; they don’t need to spend an extra $79 a year for a service they already receive. It’s only the discounted one-day shipping that offers something new. Most people can wait a couple days for their books. For those who can’t, Amazon Prime is a fine service to reduce expenses on expedited shipments.

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