Amazon strikes back again at Walmart's free 2-day shipping offer

AmazonGetty ImagesA worker inside an Amazon warehouse.

Amazon is making it cheaper to qualify for free shipping.

The retailer just lowered its free-shipping minimum to $US25 from $US35 for customers who aren’t members of its Prime membership program. The website Best Black Friday alerted us to the change.

This is the second time in three months that Amazon has lowered its free shipping threshold.

In February, the retailer dropped the minimum to $US35 from $US49 right after Walmart rolled out free two-day shipping for all customers on orders over $US35.

The second drop comes after Walmart’s launch of new discount for
customers who ship purchases to one of the retailer’s stores, instead of to a home or elsewhere. The discount knocks as much as $US50 off purchases of larger items like televisions.

Amazon is likely hoping that the cheaper free shipping threshold makes it better able to compete with Walmart for non-Prime members.

But Walmart is still the better deal for those customers because it’s offering all shoppers free two-day delivery — something Amazon offers only to Prime members.

“Although non-Prime members can now avoid shipping fees, they will still have to wait for up to a week for their packages to arrive,” said Sarah Engel, the senior vice president of global marketing for the retail analytics firm DynamicAction. “The fact that Amazon didn’t outright match Wal-mart’s free shipping timeline shows their continued commitment to the recurring revenue Prime model.”

Amazon Prime members pay $US99 annually for free two-day shipping and a host of other services like unlimited streaming of movies and music. Prime members don’t have to spend a minimum to qualify for free shipping.

Walmart has been investing heavily in ecommerce, but it has a long way to go before it catches up with Amazon.

Walmart’s online sales were $US13.7 billion in 2015, compared with Amazon’s $US107 billion. Walmart is still far ahead in terms of overall sales, however.

Walmart generated $US486 billion in fiscal 2016, which is more than three times as much as Amazon’s revenue of $US136 billion.

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