Amazon Prime - Standard Shipping Incentive

[MoulinBlu]

Originally Posted by sycro

Might want to read this to understand how they ARE losing money. $11 per member in fact.

http://business.time.com/2011/11/14/...-huge-success/

It even breaks it down to the exact expenses. Shipping is on average $55/year and digital content (video and books) is another $35.

I've seen it; it hardly breaks it down to any kind of exact expenses. In fact it doesn't mention any exact expenses at all. I think it's largely spin from how amazon reports shipping for tax purposes. If they're factoring in all the free, trial, and reduced price memberships... well, that speaks for itself. But the last major company I know of that reported the kind of net losses that that article suggests, from just one - relatively much smaller - division of their operations... well, they aren't in business anymore.

I do believe that prime membership encourages both spending and consumer loyalty though. I know it's encouraged me to buy from them more, even though I no longer have the kind of blind loyalty I did a few years back toward them.

They don't spend a dime on digital content for me. I don't use it and don't want it, despite being able to take advantage of it on both my computer and PS3, if we could get a faster service in our area than a somewhat spotty 3mbs dsl that is.

As for shipping, to add some perspective, B&N offers the same service as amazon for only $25 per year. Best Buy offers it for free, for silver members.