Free Shipping Downgrades Make Amazon Prime Less Enticing

Is it just me or has Amazon free shipping gotten significantly worse over the past year?  If it indeed has, you have to suspect that this could very well be on purpose.  They are really making a push to get as many people signed up for Prime, so is it a conspiracy theory or just common sense that they would try to drive people to Prime by weakening the free shipping option?

I’m here to tell you that, for me, making free shipping worse will have the opposite effect for me.

Let me start off with some of the changes I have seen:

  • Increased minimum threshold – Last year, Amazon quietly raised the threshold on orders which qualify for free shipping from $25 to $35.  At the time, this didn’t bother me so much.  After all, the $25 threshold was around for many years, and since the price of goods has gone up, it kind of makes sense that they would have to raise the threshold to keep it in line.
  • Pseudo-exclusion of items to reach the threshold – Have you ever seen an Amazon item listed as an ‘Add-On Item’ and wondered what that was all about?  I’m here to tell you.  Amazon will not count that item toward the $35 threshold when calculating whether you qualify for free shipping.  Before, if you were $4 short, you could find an item for $4 or $5 and throw it in to get you over the threshold.  Now, if it’s an add-on item, it won’t qualify.  Basically, all of the items NOT marked Add-on items have to total $35, after which even the add-on items will be shipped for free.
  • Strange carriers – For awhile, we received items from FedEx, UPS, or the USPS.  OLYMPUS DIGITAL CAMERAThen, we started getting Amazon orders from very weird sources.  People in unmarked vans would come down the street, stop in front of our house, and come deliver our package.   Amazon evidently started using third party logistics companies to handle deliveries.  I’m not going to lie, it was kind of creepy.
  • Sort of closing the ‘Subscribe and Save’ loophole – For items that people by on a pretty regular basis, you can order them with Subscribe and Save.  This will get you free shipping, even below the $35 threshold, and you get put on a recurring cycle where Amazon will ship the item to you every so-many months.  They give you 5% on top of it.  A common strategy was to order the item, have it shipped, and immediately cancel.  Now, I’ve noticed that when you place an order, they won’t ship you the first one right away, as they used to do.  The two things I’ve ordered have taken three weeks to ship. And they tell you this up front.  I would think that this is meant to discourage people from the ‘sign up and cancel’ tactic by making them wait, and probably has some element of ‘maybe the customer will forget to cancel’.
  • Slower shipping times – As of the time I’m writing this, I have an order that I placed eight days ago which qualified for free shipping.  Amazon has not, so far as I can tell, done anything for this order.  It’s still there in ‘Not Yet Shipped’ status.  To be fair, they still haven’t charged my card, but I’ve noticed that it seems to take longer and longer for Amazon to send your orders.

Now, before we go any further, let me just say that for most of the items above, I am not angry or upset at the changes.  From a purely business model, I get it.  They are in business to make a profit, and I’m not calling for them to be reversed.  I’m not even calling them unreasonable.  For the most part, they are reasonable.  However, from my perspective, as a consumer who used to have a lower threshold, faster shipping, and carriers whose first impressions don’t scream ‘ex-con’, then reasonable or not, they are noticeable changes to me as a consumer.  I’m entitled to note the effect of the changes on me just as much as Amazon is entitled to make the changes.

But this can all be solved with Prime, from what Amazon promises.  You don’t have the minimum order threshold. You get your stuff in two days, which maybe takes creepy van guy out of the picture.

Oh, and Amazon will tell you each and every time that you also get access to their streaming videos and such.

Sounds like a fantastic deal, so I guess it begs the logical question, why would these incentives make me less likely to gravitate toward Prime?

Here goes:

  1. The changes above reflect on Amazon as a whole – Amazon can make changes in the ‘free shipping’ world and hope that it makes their ‘Prime’ world more attractive, but I see beyond that and look at the changes as an Amazon perspective.  Amazon ‘free shipping’ is still Amazon, and by tweaking and making it less attractive, it weakens the entire brand.  At least in my mind.  That makes me overall less inclined to buy from Amazon, including purchasing Prime.
  2. I’m stubborn – Having things ‘taken away’ doesn’t sit well with me.  If a company starts giving you less product for the same price, I’ll call attention to it and I’ll also see if I can adjust my usage habits so that my per-use charge doesn’t go up.  In other words, I don’t just ‘roll over’ and take it.  I’ll put up a fight as much as it makes sens.
  3. I want to keep temptation at arms length – I know many people who proclaim that Amazon Prime is amazing, but when you get deeper into their shopping habits, you start to learn that they spend more because it’s so convenient.  That’s exactly what Amazon wants.  It’s $79 and there are costs involved for them to provide you the streaming content, the increased shipping, and such, but you know that they’re making that up and then some by increased sales.
  4. What’s to say they won’t devalue Prime? – If Amazon is willing to take away satisfaction from a group of customers, what’s to say that they won’t test the waters with Prime members?  Cable companies do it all the time, but the difference is that they have a more captive audience and can get away with it.  Still, don’t think that a company like Amazon might not test the waters to see just what limits their customers will accept.

I’m not saying that I will refuse to ever join Amazon Prime.  One day, you may read on this very blog that I’ve joined.  However, if that happens, it will not be because of the changes that they make to their free shipping policies.  It would be in spite of them.

Agree? Disagree? Experiences with Amazon Prime? Please share in the comments or social media options below.

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Amazon Is No Longer My Go To Store

I don’t know about you, but I haven’t been nearly the frequent Amazon shopper that I used to be.

Back in my peak Amazon shopping, we bought things all the time.  When they first introduced the Amazon Mom program, we got diapers at a really cheap price, as well as Prime shipping benefits.

We bought pretty much everything we could through there.

Even before Prime, we were pretty regular shoppers.

Eventually, they cut back the diaper deal so that you had to get a paid Prime membership to get the best percentages off, and even then, the percentage off had been cut.

They also cut the percentage off on many other Subscribe & Save items that I had previously purchased (such as razors, soap, etc.)

Turns out, it’s not just me that has noticed these things. I saw a recent article on Seeking Alpha with hard proof that Amazon has been raising prices and such.

The biggest tidbit that I found interesting was that they don’t really have that much better margins than a traditional brick & mortar retailer, even though you think they would.  The article really doesn’t specify why, but it does point to some pretty solid numbers that back up this fact.  And, it discusses how the fact that they’re raising prices close to, or in many cases, above brick & mortar stores, is eroding the competitive advantage that they had in the customers eyes.

I would say that’s definitely true.

We’ve deferred a number of purchases away from Amazon for a variety of reasons.  Here’s a few examples of items we once would have purchased from Amazon but instead purchased elsewhere just in the last six months:

  • Diapers – When they insisted that we pay $79 to continue getting the discounts in the Amazon Mom program, and also cut the discount from 30% to 20%, this was a double whammy that I just couldn’t stomach. One or the other would have been fine, but both at the same time just didn’t work for me.  We look for coupons and store specials.  Our grocery store often has a deal where if you buy a box or two of diapers at a sale price, they give you a gift card to use on your next purchase.  We stack that with coupons we clip, and since we buy groceries there anyways, it just takes that gift card total from our next amount.
  • Car seat – It’s about time for Baby Girl Beagle to get out of the car carrier and into a car seat, as she’s crossing the threshold of being able to fit in it.  We looked online a week before we were leaving for a long trip.  The price that they had was great.  I knew that Super Saver shipping likely wouldn’t work, but I knew that Standard shipping was 3-5 business days, so I figured this would be perfect. Not so much.  Even though we were looking in the morning, Amazon said it wouldn’t ship until the following business day.  This would leave us at risk of the car seat not arriving in time if it did take five business days to ship.  We went to the baby store and purchase it instead for just $2 more.
  • Camping Stuff – We’ve been buying a lot of supplies to stock the new camper.  While we did buy quite a few things on Amazon, I actually cancelled one order because of the ridiculousness of shipping time.  I had an order of six items.  One was back ordered by about 4 weeks.  Instead of shipping the other items, they were holding the entire order.  I finally got sick of it and cancelled the whole thing.  Granted, I know with Super Saver Shipping, they have every right to do this, but in the twelve years I’ve used Super Saver shipping, I’ve never had them hold an entire order for that long for one item.
  • Customer service – I wrote Amazon about the changes to Amazon Mom and they never even replied, not even with a form letter.  I realize they may have gotten inundated with queries/complaints about the changes, but I always received a response to any inquiry I made with them in the past.

It’s nothing big and it’s not like I dislike Amazon.  I just don’t hold them in the esteem that I used to.  If they’re not careful and they lose the ‘automatic’ ordering of many customers, it will start to add up and quickly.  Amazon is one of the most established and well thought of names in the business, but that doesn’t mean that they can rely on that to keep customers all while making business decisions that are customer unfriendly.

Just ask Netflix.  They were once the darlings of entertainment. Their model was awesome and everybody loved getting those little red envelopes in the mail.  They could do no wrong.  Then, a few decisions later and their stock price had fallen 80% and they’d lost hundreds of thousands of customers along the way.

Oops.

Amazon isn’t there. Yet.  But at the same time, they haven’t won many points lately.  At least not in this customers eyes.

Have you noticed any changes to Amazon lately?  Any change in buying habits?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Debunking The Amazon Prime Pricing Myth

Amazon Prime is something we have strongly considered purchasing for quite some time.  We originally got a free one-year subscription by joining the Amazon Mom program, but when that ran out, we reverted back to the Free Super Shipping option.  Giving away the one year for free is a great gimmick, because you really don’t know how much you appreciate it until you don’t have it anymore.

It’ just nice to be able to log in, order something, not really worry about whether your order totals $25, and have the item in two days (of course, you still have to be careful that the items are shipped by Amazon, as many third party resellers are not included in Prime).

mb-201201primeAs we’ve considered Prime, I’ve done some checking, and there seems to be more than a few people that believe that Amazon Prime membership is a joke, and that they simply charge Prime members a higher price by directing them to a higher cost version of their product.

I don’t have any specific examples to cite (simply because I don’t have the benefit of a Prime membership to search with), but I’ve seen similar numbers used as an example:

Person A without Prime searches on an item and the main result comes back at $19.99 from a third party seller.

Person B with Prime searches on an item and the main result comes back at $21.99, sold directly by Amazon.

At first glance, this appears that Amazon is charging Prime members more.

Oh, the outrage, right?

Wrong.

See, Amazon returns the results based on the lowest total cost to you.  And, what’s the difference between your two customers?

Shipping costs.

Amazon assumes that Person A, who doesn’t have Prime, will buy the item alone.  Since they don’t have Prime and wouldn’t qualify for any shipping cost exclusions, Amazon assumes that they will pay shipping regardless.  Assume, for the sake of argument, that the shipping cost by both Amazon direct and the third-party seller is $4.99.  The $21.99 version is sold by Amazon, but since Amazon believes that this customer will buy the item alone, they factor in the expected shipping cost.  Thus, the lowest cost item to the customer is the $19.99 third-party version, which added with the $4.99 shipping cost, totals $24.98, lower than the Amazon directly sold version, which would total $26.98.

But, why does the Prime member get the $21.99 version?  Simple.  Because for them, the version sold directly by Amazon will include free shipping, whereas the third party version for $19.99 would include shipping charges anyway.  Thus their ‘total cost’ on the Amazon directly sold version is $21.99, whereas it’s still going to be $24.98 for the third party sold version.

In other words: Amazon has provided both customers with the version that is cheapest to them based on the item pricing, expected shipping costs, and their membership status.

I know these examples don’t include ‘real’ numbers, but I’m 99% certain that this is the model that Amazon follows.  And, if so, there is no reason to think that Amazon is trying to charge a higher price for a Prime vs. non-Prime customer (or vice versa).  On the contrary, it seems that they’re doing their best to ensure that you get the lowest price possible given the circumstance.

Do you use Amazon Prime?  If so, do you think it saves you money in the long run?  Have you ever run into the different pricing structure as noted above?

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Is Amazon Prime Worth The Cost?

I’ve been a member of the Amazon Mom program for over a year now.  This has been a great savings boost to us, as we got 30% off diapers and other baby supplies, as well as a year free of Amazon Prime shipping benefits.

The free year of Prime just came to an end for us.  We still get to enjoy the discounted diapers and baby supplies, though they’ve recently cut it back to a 20% savings (hint: items that you subscribe too have stayed at the 30% off level, and I’ve been told that you can activate ‘dormant’ subscriptions, change diaper sizes, and those will maintain the 30% savings threshold as well, but your mileage may vary).  What we will no longer get is free two-day shipping on just about any item sold by Amazon.

This has definitely come in handy, and I’m not going to lie, we’ve probably bought quite a few things from Amazon over the past year that we might not have otherwise, simply because we didn’t have to worry about hitting the $25 spending limit to get free super-saver shipping.

We’re debating whether to add back the Prime membership.  This would cost us $79 (though I’m letting it expire in faint hope that they’ll offer a discount) which averages just over $6.50 per month.

In addition to the shipping benefits, we’d also get to enjoy the video streaming service that they rolled out.  As it so happens, the ‘free’ Prime that they gave did not include that little nugget.  We have indefinitely suspended our Netflix account, but getting Prime would make it almost a no-brainer to use the streaming video service (though we would also have to buy a Roku video player to handle the streaming).

How many of you use Amazon Prime?

How many of you have experience with the streaming video service?  With the Roku devices that we would likely need to purchase?

I’m curious as to what you think, readers: Is Amazon Prime worth the cost?

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