Actually Interesting News — Amazon Expands Prime To Items Shipped Directly from Merchants

by | Jun 13, 2015 | Blog

On-AMZN:  No doubt Amazon gets it share of press.  It’s been a few weeks since I’ve commented as I haven’t seen anything really surprising or potentially competitively gamechanging for Amazon.  This story on WSJ by Greg Bensinger — “Amazon Expands Prime with Goods Shipped Directly From Merchants” is actually both.  Amazon Prime membership is estimated to be 40 – 50 million customers and grew substantially over the past year.  (side note:  since each Prime account can have 4 “family members”  who also use the Prime membership, how many ordering customers are actually Prime ordering customers??).  Third party (3p) sales account for over 42% of all units shipped and sold.  According to Bensinger, a pilot program allowing  3p sellers to list items as “Prime eligible” but ship 2nd day from their fulfillment center builds an avenue to greatly expand items for Prime, and Amazon doesn’t incur the expediated shipping costs!  Brilliant.  In classic Amazon style, this is started in a limited manner and without official announcement.  Trust me — this will grow in impact.

Amazon Prime

Amazon Expands Prime With Goods Shipped Directly From Merchants

WSJ — Greg Bensinger has quietly begun rolling out a program that could dramatically increase the number of items eligible for two-day shipping through its Prime membership.

The e-commerce giant is now listing items in Prime that ship directly from independent merchants’ warehouses to customer doorsteps. Until now, merchants have had to ship merchandise to an Amazon warehouse for it to be eligible for Prime.

The $99-per-year Prime unlimited-shipping program has become central to Amazon’s sales growth, with Prime members spending twice as much as non-Prime customers, by some estimates. Bulking up the number of Prime-eligible items could entice more customers to join the program and make current members more likely to renew…

The new program could help Amazon expand the merchandise available through Prime beyond the 20 million items now listed. Historically, some vendors have been reluctant to store their goods in Amazon warehouses, either because of concerns about triggering additional taxes or because of the time and cost of the additional shipping.

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