Amazon strikes back 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 from $US49 to $US35 for customers who aren’t members of its Prime membership program.

The change appears to be a response to Walmart’s recent rollout of free two-day shipping for all customers on orders over $US35.

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

But Walmart is still the better deal for those customers because it offers all shoppers two-day delivery free of cost — something Amazon only offers 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, 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’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.

Get the latest Walmart stock price here.

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