According to Recode, Amazon is making it possible for Prime members to shop for low-cost items and have these shipped for free the next day.
- Amazon has been gradually making it possible for Prime members to shop for low-cost items on its site (under $5) and have these shipped on their own for free, according to a new report from Recode.
- This means that Prime shoppers can spend as little as $1 on an item, for example, and receive it the next day without incurring any shipping costs.
- Previously, they would have had to add low-cost items such as toothpaste or deodorant as an "add-on" to another, minimum $25 order to qualify for free shipping.
- The news should terrify Amazon's competitors in this space such as Target, CVS, or Walgreens, where shoppers might otherwise go to pick up low-cost items.
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Amazon is taking a further step toward ensuring its customers never need to go to a store.
According to a new report from Recode's Jason Del Rey, the retail giant has been gradually making it possible for Prime members to shop for low-cost items on its site (under $5) and have them shipped on their own for free.
This means that Prime shoppers can spend as little as $1 on an item, for example, and receive it the next day without incurring any shipping costs. Previously, the Prime shopper would have had to add low-cost items such as deodorants or toothpaste, for example, via its "add-on" tool, which enables these items to be shipped for free when you spend a minimum of $25.
On its site, Amazon explains that it offers the Add-on service to allow it to "offer thousands of low-priced items that would be cost-prohibitive to ship on their own."
According to a September report from analysts at Edgewater Research, which was cited by Recode, Amazon has "essentially turned off" this add-on feature in the past few months. Now, many consumer packaged goods — items like deodorant or toothpaste — will be available for free shipping when they purchase them alone.
Amazon did not immediately respond to Business Insider's request for comment. In a statement to Recode, a spokesperson said: "We know customers love our vast selection, low prices, and free one-day delivery with Prime and we are always innovating to improve their experience."
The news should terrify Amazon's competitors such as Target, CVS, or Walgreens — companies running brick-and-mortar stores where shoppers might otherwise go to pick up low-cost items on short notice. If these are items are now available to buy online and have shipped to your home the next day, they'll have fewer reasons to visit the store.
But Amazon's moves into this market should raise red flags from an antitrust perspective, experts say.
"There's no way that shipping costs are less than 75 cents, and there's no way any other company that wants to sell a makeup brush could deliver that for free. It's not possible and it highlights how pricing strategies can be used to drive rivals from the market. But antitrust law currently misses this anticompetitive conduct with its obsession on low prices," Sally Hubbard, an antitrust expert, told Recode.
And as Recode writer Jason Del Rey points out, the free shipping of smaller items is likely to cause issues with environmental activists who already urging the company to commit to zero emissions by 2030.