Will Amazon lose money by limiting free delivery?

Amazon announced that free super save delivery would not apply to orders below £10, except for certain products, for example, books and DVDs. What might happen to Amazon’s profits or lack of?

Photo of Amazon's logo

Amazon’s logo.

Needs and user behaviour

Analysing, as this blog does for search engine, user’s allows us to find out what affects this small change will have for Amazon.

  • Customer’s behaviour might increase expenditure because customer’s will spend more money in order to quality for free delivery. Instead of buying a pack of discs, for instance, a customer might add an additional item, such as a USB pen drive, to make the £10 total.
  • Some people prefer to shop using the web so their shopping patterns are unlikely to change because going into a traditional store is already off putting.
  • It is, however, worth noting that there is now “more hassle” for Amazon customers who initially wanted to purchase a small, inexpensive item reflected in an inexpensive invoice. These types of customers may go back to being a “traditional shopper” for smaller items. Local stores, additionally, provide instant products which, in an ideal world, is what any shopper wants.

Do you think Amazon will lose or gain money? Tweet Gerald or comment below.

Posted by Gerald Murphy

References

  1. BBC. (2013) Amazon scraps free delivery on some purchases under £10 [Online] [Accessed on 23rd July 2013]
  2. Amazon. (no date) Free delivery at Amazon. [Online] [Accessed on 23rd July 2013]
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