Amazon Prime Will Pay You For Slower Delivery, Because Profit
For avid online shoppers, Amazon Prime has been a blessing — a one-year membership allows members free two-day shipping. But apparently, this whole fast delivery promise is cramping Amazon's style: Amazon asked Prime members to stop requesting rush shipping as a way to lower expenses. The Internet retailer has reportedly suffered a massive loss this year, and it's all thanks to Amazon's loyal Prime customers. So, according to CNET, Amazon is offering members $1 credit toward Amazon Instant Video every time they opt out of rush shipping.
So, that means trading in free two-day shipping for five-to-seven-day delivery. CNET pointed out that the company has even added the option to its website, calling it, "Free No-Rush Shipping (5-7 business days)" and promising the video credit.
In the past, Amazon Prime members could either check off free standard shipping (three to five business days), free two-day shipping, or pay a bit extra for either one-day shipping or same-day delivery. The $1 Amazon Instant Video is only being given to customers who opt for the no-rush shipping — an added incentive to take your time, naturally.
Although free money typically sounds like a good thing, this may not be the best deal for customers. Amazon Prime members can already watch more than 40,000 movies and TV shows for free on Amazon Instant Video — another benefit of paying an annual $99 membership fee. For videos that aren't free for Prime subscribers, $1 still isn't enough to cut it, as most Amazon videos cost between $1.99 and $2.99 to rent.
The motivation behind this push toward no-rush delivery plus $1 instant video credit is still unclear, though some speculate that it may have to do with Amazon's loss. According to TIME, the retailer's 2014 second-quarter results were much lower than expected, reporting a net loss of $126 million. This time in 2013, the company's net loss was just $7 million. Amazon also reported a loss of 27 cents per share.
In a statement last week, Amazon founder and CEO Jeff Bezos said:
We continue working hard on making the Amazon customer experience better and better. We’ve recently introduced Sunday delivery coverage to 25% of the U.S. population, launched European cross-border two-day delivery for Prime, launched Prime Music with over one million songs.
Despite Amazon's newest technological forays, including the introduction of the Amazon Fire Phone, investors are reportedly growing wary of the company. After all, it's unlikely that offering $1 credit will make a huge impact in Amazon's profit margin. Additionally, the company already tried to manage the increasing cost of shipping by raising the Prime membership from $79 to $99 last March.
Is paying $99 a year for five-day shipping and the promise of video credits worth it? Before you answer that, just know this: HBO shows and movies are exempted from the video credits. Of course.
Images: Getty Images, Amazon.com