Chew

Posted on the main page of Amazon:


I guess it's great for somebody who orders a lot from Amazon, but I don't know if I would order that much to make it worth the $79.

neiname

$25 isn't really that much of a minimum and I can wait the 3-5 days it normally takes to get my merchandise... If they did away with the free shipping option (which they probably will), I will sign up for this.

reverie

Certainly not worth it for me. If they do away with free shipping, that will most definitely be the final nail in the coffin after Share the Love, and I wouldn't see any reason to shop there again.

HN

As mentioned on another board:

(In terms and conditions)
"YOU UNDERSTAND YOUR MEMBERSHIP WILL AUTOMATICALLY RENEW AND YOU AUTHORIZE US TO CHARGE TO YOUR CREDIT OR DEBIT CARD (WITHOUT NOTICE TO YOU) THE THEN-APPLICABLE ANNUAL MEMBERSHIP FEE AND ANY TAXES, UNLESS YOU NOTIFY US BEFORE RENEWAL THAT YOU WANT TO CANCEL YOUR MEMBERSHIP."


Yay for automation!

chanster

Amazon must be hurting. I can usually scrape togetther an order for things that I need, want to get over $25. I sure hope they start really slowing down free shipping because of this

marty888

Well, considering that the last (and with the death of STL, I probably really mean the last) several orders from Amazon have all arrived in 2-3 days with FREE SHIPPING, this is definitely something I can ignore.

honeybefly

I guess the Supersaver shipping program has been discontinued.

garolo

Uh, no it hasn't. At least not yet.

Easy

You got that right. I was very disappointed with the loss of STL but it didn't totally drive me away from Amazon. The loss of free shipping would.

Laser Movies

All I can say is the "Amazon Prime" membership is not going to encourage me to buy anything. Bring back STL or coupons!

matome

or the nickels!!!

If DVDEmpire did this, I would be all over it!

Jim

They're not doing it because they're hurting. They just reported net income of 82 cents per share, up from 17 cents per share a year ago.

illennium

I personally don't care if my DVDs arrive on release day, or the week after, or next year. I'm not a child who needs things now now now. With books, I care more because I'm often using them for time-sensitive work or research, although in those cases I obviously only order from Amazon after checking local stores. In other words, I'm very happy with free supersaver shipping even if it's very slow, which it often is not. If they do away with that, then I'll be annoyed.

Dukemstr

Why aren't they taking any attention to their International costumers who make a big block of their sale? why don't we get any shipping promotion

Dukemstr

Josh-da-man

Not yet, but I wouldn't be shocked if this wasn't the handwriting on the wall.

What's the point -- really -- in charging $80 a year for a service they already provide?

I can't see this taking off at all unless they do away with super saver shipping. Even if they raised the limit to over $25, it would just encourage people to buy more... and that would seem to be the point of this "Amazon Prime" program.

I mean, if you're paying $80 UP FRONT for shipping over an entire year, they probably believe that that would encourage you to use Amazon for more purchases.

The $25 super-saver limit is really nothing. It's what, two or three typical items?

naughty jonny

And why the hell do we still get it as our "enty" page into Amazon?

They already know who I am from the cookie and set "hello. we know you, so you'd probably like XXXXX" normally, so why the hell do they need to spam us when we're not allowed to sign up for it?

It's like they are trying to be Nelson Muntz and going "ha ha" to us international people.

chanster

What are you talking about? Their quarter were pretty bad. Take a look at this article that came out today. Free shipping is seen as a major cost impediment.

I would say 2-3 months, we see Free Shipping go up to $49..then disappear after that.

Amazon Profit Misses Forecast, Shares Dip
Wednesday February 2, 8:16 pm ET
By Michael Kahn

SAN FRANCISCO (Reuters) - Amazon.com Inc. (NasdaqNM:AMZN - News) on Wednesday posted a quarterly profit that missed Wall Street estimates and it unveiled a costly new shipping program that heightened concern about falling margins, sending its shares tumbling 14 percent.

Fourth-quarter net earnings more than quadrupled as a weak dollar boosted record holiday sales and the company recorded a $244 million tax benefit. But incentives like free shipping and discounts cut into profits and hurt margins.

"Margins are well below expectations -- revenues were good, but margins are a disaster," said Chris Baggini, manager of the Gartmore Growth Fund.

"Product mix was not in their favor. Price competition crushed their margins," said Baggini, whose fund does not own Amazon shares. "They had to offer a lot more free delivery product to move the sale."

Net income during the quarter, which includes the critical holiday season, rose to $346.7 million, or 82 cents per share, from $73.2 million, or 17 cents per share, a year ago.

But stripping out the benefit from a $244 million tax asset, the company said net income excluding items would have been 35 cents a share. On that basis, Wall Street analysts were expecting the company to post a profit of 40 cents a share.

Sales rose 31 percent to $2.54 billion as lower prices and free shipping attracted customers during the critical holiday season. Excluding the benefits from changes in foreign exchange rates, sales rose 26 percent, the company said.

Sales in North America, the company's biggest market, rose 22 percent to $1.39 billion while international sales shot up 43 percent to $1.15 billion, helped by new offerings such as a DVD rental service in Britain.

But Janco Partners analyst Martin Pyykkonen said Amazon's worsening profit margins "stuck out like a sore thumb. Gross margin fell to 23.1 percent from 23.9 percent due in part to lower prices and free shipping as part of the company's goal of attracting more customers and boosting overall profits.

"They're selling more stuff and making less profit margin on it," said Pyykkonen, who predicted customers would embrace Amazon Prime, a new program allows members to pay $79 annually for unlimited, express two-day free shipping with no minimum purchase requirement.

"It's great for the consumer, not for great for margins," Pyykkonen said.

The company also raised its 2005 sales outlook, but investors still sold Amazon stock in after-hours trading amid concerns over the cost of the new shipping program.

"Make no mistake about it, we expect Amazon Prime to be expensive for the company in the short term," Amazon Chief Financial Officer Tom Szkutak told reporters. "It is perhaps the most expensive thing we have done since free super-saver shipping.

"However, over the long term we believe that Amazon Prime will drive incremental demand just as super-saver shipping has done."

Amazon said it expects first-quarter sales to be between $1.80 billion and $1.95 billion. Analysts on average were expecting sales to hit $1.83 billion, in a range of $1.60 billion to $1.91 billion, according to Reuters Estimates.

For the full year 2005, the company raised its sales outlook to a range of $8.05 billion to $8.65 billion from an earlier estimate of $7.40 billion to $8.15 billion.

Amazon shares slumped to $35.80 in after-hours trading on the Inet electronic brokerage, down from their Nasdaq close of $41.88.

ChiTownAbs, Inc

I agree that Amazon will probably up the minimum to $49 for a year then it'll be gone.

Zodo

I think the program is crap and if they cancel super saver shipping then I'll pretty much be done with Amazon.

Buford T Pusser

I'm not a fan of membership programs that cost up front. I'm too damn cheap and can wait a bit longer for free shipping via the slow way.

I would never get the $79 back since I never pay for shipping there. Now if they drop the free shipping I will shop there MUCH less.

As it is, I mostly buy books that are 30 percent off or more and just the occasional DVD and CD.

Josh-da-man

Same here.

I only buy the occasional DVD from Amazon, and no CDs. Mostly the Buffy/Angel DVD sets, or when they have the best price on something. For the most part, their prices for DVDs and CDs pretty much suck ass. There's always another place that has a better price.

I mostly buy books at their discount prices. Lots of books; they're my primary source for books these days.

If they do away with Super Saver free shipping it'll pretty much blow my savings, and make it pointless to buy from them. They will have officially lost a customer. Raising the free shipping level up to $49 (or even $99) it won't effect me much since I buy a lot of books, and wouldn't have any trouble finding something I wanted to pad out an order.

I'm also not a fan of repeat buyer incentive programs I have to pay to get into. Seriously, fuck that noise. I'm not going to pay anyone just to have an incentive to shop at their store. What sucks about Amazon's "Prime" is that it costs $80 a year for something they already offer at no charge. And even then, at a savings of something like $5.00 an order (providing they do away with Super Saver shipping) you'd have to place sixteen orders to break even.

Eve Brown

Waste of money

natevines

When I first saw this on amazon, I didn't take the time to read it and after seeing the "all-you-can-eat", I thought Amazon was initiating a food program.

Yes, I'm that pathetic

Manzana

I totally agree with chanster. I had read that article off Yahoo, and when I saw free shipping and incentives mentioned I immediately thought Share the Love (which they've already dropped) and figured free shipping would be next to get the axe. I already stopped ordering from Amazon when they dropped STL, so if I'm not willing to order with just free shipping, does Amazon think that if they drop free shipping that will really make me want to order from them?

Obviously we're just speculating, but profits for people like Bozos (or whatever his name is) and other stockholders are their most important concern (however companies like Worldcom and Enron didn't care about stockholders when we owned those stocks, but since we don't have any Amazon stock I expect it to be protected and do well), so all these incentives are likely to go. I think people's theories of them upping the free shipping limit (and probably with no warning like they dropped STL) and then cancelling it fits their pattern. I know in past years they had taken it away and then brought it back. If we lose it again, will it and STL ever come back? If not, then as long as DeepDiscountDVD doesn't pull similar stunts and start charging shipping and sales tax, DDD will be getting a lot of business.

On many titles I can do equally well at a Borders store with a 10-15% coupon + sales tax than I can at Amazon with free shipping and no STL. That's pretty sad.

marty888

Just checked pricesearch, and according to them:

DVDs priced lowest at DeepDiscountDVD: 9797
DVDs priced lowest at Amazon.Com......: 493

No STL, starting to screw around with the shipping...... hmmm ..... decisions, decisions.