Amazon launches free shipping on small items

3 Jun 2015 | Author: | No comments yet »

Amazon Goes After ‘Small and Light’ Online Sales.

The company just rolled out a new program, called “Fulfillment by Amazon Small and Light,” which offers free shipping in the U.S for certain small items that cost $10 or less. The online retailing giant’s new initiative means that all shoppers can buy thousands of products like cosmetics and phone accessories without having to fork over extra for delivery, according to a Bloomberg report.

The low-cost fulfillment service means no minimum order is required and customers do not need to be enrolled in Amazon Prime to take advantage of it, according to postings on the site’s sellers forum. “The new program provides a cost effective way for sellers to offer low-cost items and for customers to get free shipping. Amazon seems to be targeting cost-conscious shoppers who are more reluctant to commit to the Prime membership’s $99 annual fee but who will likely shop more from Amazon because of the free shipping. The program, the latest move by retailers to go after a piece of the online market by cutting shipping prices, is targeted at items that often can cost almost as much to ship as the items themselves are worth.

The move can also help Amazon remain competitive in the face of other retailers like Walmart and Target recently announcing their own fast-shipping programs for low fees. The program, first reported by Bloomberg Business, began rolling out Monday, though Amazon has been quietly testing the service for the last three weeks, according to the report. Third-party sellers, meanwhile, would pay fees starting at $1.90 per unit to use Amazon’s fulfillment services, compared with $2.50 under Amazon’s catchall pricing for products of all sizes.

Sellers who list their merchandise on the Amazon site also can leverage the Seattle-based company’s logistics network by storing inventory in Amazon warehouses and having customer orders packaged and shipped directly. All “small and light” orders, as Amazon calls them, will be shipped from a new fulfillment center in Florence, Ky., dedicated to products no heavier than 8 ounces. While Amazon’s other fulfillment centers deal with products and packages of many shapes and sizes, having a facility that exclusively handles small products enables the use of smaller equipment and streamlined processes, bringing costs down, Mr. The products will ship free for delivery in four to eight days whether or not customers have free shipping privileges through Amazon Prime membership.

The move comes as retailers with physical stores are trying to figure out how they will justify the high costs of meeting consumer demands for faster shipping and more convenience. Amazon’s critics believe many of the company’s offers aren’t cost-efficient for other retailers, and that pricing eventually will stabilize with higher requirements for minimum orders and other measures that would make improve profit margins on e-commerce sales.

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