RealTime IT News

Amazon Lowers Shipping Cost Hurdle

Turning up the heat on rival retailers, Amazon.com is cutting the minimum order size to qualify for free shipping from $99 to $49. The only catch is that it's a time-limited marketing test.

Seattle based Amazon said that its shipping offer -- called the Free Super Saver Shipping option -- is expected to last three to six months, after which the company will decide whether to make it permanent.

Of course, a six-month test would take this offer right through the 2002 holiday selling season, dramatically increasing the pressure on rival online retailers at a time when they are counting on making the most money.

Fellow bookseller Barnes & Noble.com offers free shipping to a single U.S. address if you buy two or more items. But Amazon is far more than books these days.

Amazon instituted the $99 threshold last January. Jeff Bezos, founder and CEO of Amazon.com, has repeatedly emphasized that cutting costs and then lowering prices is going to be key to the company's long-term success.

As recently as last week, Bezos said he would be open to dropping the free shipping threshold below the $99-and-up cutoff.

"...as we lower our prices, we accelerate our customer base," he said. "Customers like lower prices and we're happy to oblige."

Today's announcement is Amazon's fourth significant price cut in the past 11 months. In July 2001, the company lowered book prices to 30 percent off books over $20, and in January introduced free shipping option on orders over $99. In April, Amazon extended the 30 percent discount to books over $15.