Dive Brief:
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Among the many stats about its marketplace that Amazon blasted to reporters Tuesday was a factoid that shows the retailer found a way to address something its Prime members have long been clamoring for: more items eligible for free two-day shipping.
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For a while, only merchants wiling to participate in Amazon’s “Fulfilled by Amazon” program, which required warehousing their goods with Amazon, could offer Prime members that shipping benefit.
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But now, Amazon says, “Trusted sellers who fulfill their own products and guarantee fast, free shipping can now have their items badged and visible to customers as Prime-eligible. Participating sellers have already made Prime shipping benefits available on 500,000 products worldwide.”
Dive Insight:
Of all the perks that Amazon members enjoy — streaming television and musical entertainment, an e-book lending library, photo storage, among others — the real reason Prime members shell out their $99 yearly dues is the free, no minimum, two-day shipping on many items, according to a study by RBC Capital Markets.
In fact, the percentage of Amazon Prime members who say they prize the free shipping option the most has crept up to 78% this year from 74% in 2013, far outpacing other perks. Fewer than one in 10 Prime members signed up because of streaming video, for example, and a paltry 1% joined because of its Kindle Lending Library.
“2015 was a big year for sellers on Amazon,” Peter Faricy, VP for Amazon Marketplace, said in an emailed statement. "In fact, sellers added more new selection and shipped more items than in any previous year. We’re excited to build on that momentum as we continue to innovate on behalf of sellers and customers.”
That more than three quarters of Amazon Prime members know exactly why they’re there is an just another impressive stat among many about the e-retail giant’s membership program. (Another, of course, is the program’s massive conversion performance.)
Amazon has been working hard — including creating this flexibility for its marketplace sellers — to add more items that qualify for free two-day shipping, but it’s perhaps hard to fathom why it’s also working to add other perks to the membership. One speculation: Perhaps Prime members come for the free shipping, and stay for the streaming.
In any case they are staying: Investment firm Macquarie estimates that 40 million U.S. households are Prime members, and current growth rates could bring Prime to half of all households by 2020.