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Amazon.com just raised the minimum order threshold for free shipping to $49 on Feb. 22 without announcing it to customers ahead of time, an increase of 40 percent from the former $35 minimum order that was required through Feb. 21.
That might be fine by Amazon, but I think they made a huge mistake. Didn’t anyone at the company read all the complaints about when Netflix made a similar move and raised its rates almost overnight by 60 percent in 2011, angering lots of customers, many of whom dropped their subscriptions?
Yes, Amazon is a big business and it can ultimately do whatever it wants in terms of its policies, but I would have expected it to at least announce the move ahead of time to let customers know about such a large increase—before it popped up in their Web browsers as they placed their next orders.
I’m no Wharton business school graduate, but I can see this blunder hurting Amazon’s sales at least for a while as annoyed and angry customers go looking elsewhere to place online orders where the minimum orders may not be as high.
At least two Amazon customers I know told me in conversations that they were not happy about the unannounced minimum order hike. And at least one of them didn’t complete an order through Amazon.com on Feb. 29 after seeing the change in her online order form.
In an email reply to an inquiry from eWEEK, an Amazon spokeswoman wrote that the free shipping threshold was raised to $49 as part of an occasional review of the company’s shipping options. “Our objective is to offer customers low prices, as well as convenient free shipping options, on the millions of products available on Amazon.com,” she wrote.
While the overall free shipping minimum order went up, the company meanwhile did reduce its free shipping eligibility for all orders containing at least $25 worth of books, she wrote, down from the previous $35 order minimum that had been in place since October 2013. “All other services, including Amazon Prime, remain unchanged.”
And there, finally, is the crux of the matter.
That’s likely what’s ultimately behind Amazon’s 40 percent minimum order threshold increase—Amazon wants to force its customers into paying $99 a year for its Amazon Prime services, which provide unlimited free two-day shipping, free music and video streaming and other benefits to users. By getting customers to pay for Amazon Prime, it’s a dedicated revenue stream, plus it makes customers more likely to buy from Amazon and use its other services.
I do pay for Amazon Prime and I like the convenient and faster shipping option it offers. But to “force” customers to pay for the premium service by making free services much more expensive without any warning is not something I’d expect from Amazon.
What Amazon should do now is offer customers a discounted first year of Prime to apologize for its insensitivity.
What say you, Amazon?