This move comes as the eCommerce giant looks for ways to cut costs and streamline its operations, CNBC reported Monday (Aug. 28).
Previously, non-Prime members were required to spend $25 to qualify for free shipping, according to the report. However, with the new policy, these customers will now have to spend at least $35 for free shipping. Prime members, who pay an annual fee of $139, will not be affected and will continue to receive free shipping.
Reached for comment, Kristina Pressentin, an Amazon spokesperson, told PYMNTS in an emailed statement: “We continually evaluate our offerings and make adjustments based on those assessments. We’re currently testing a $35 minimum for non-Prime customers to qualify for free shipping. Prime members continue to enjoy free delivery.”
This change in the free shipping threshold could potentially incentivize more customers to sign up for the Prime membership program, according to the CNBC report. Prime membership not only includes free, two-day shipping but also grants access to streaming services and other perks.
PYMNTS research has found that free shipping is the No. 1 reason consumers sign up for Amazon Prime. Eighty-four percent of Amazon Shoppers with Prime subscriptions cited that as a reason, according to “Walmart+ Weekend: Prime Rival or Trip to the Grocery Store?”
In 2021, Amazon reported having more than 200 million Prime subscribers globally, and subscription services, including Prime memberships, generated about $9.9 billion in revenue, the CNBC report said, citing the retailer’s latest quarterly earnings report.
Amazon has adjusted the free shipping threshold for non-Prime members in the past, per the report. In 2016, the minimum purchase requirement was raised to $49 from $35 but was later reverted back to the original threshold a year later. The minimum was then reduced to $25 as part of an effort to compete with Walmart, which also has a $35 free shipping minimum for non-loyalty program shoppers.
This change in the free shipping minimum is part of a broader review of expenses undertaken by Amazon’s CEO, Andy Jassy, per the report. The company has made various cost-cutting measures, including job cuts, hiring freezes, and the introduction of delivery fees on Fresh grocery orders below $150.