Commentary

Ahoy! Amazon, EBay And Walmart Float Shipping News

Once upon a time not that long ago, shipping news was a staple item in many a daily newspaper so that merchants could keep track of when the vessels bearing their bolts of cloth and barrels of molasses would arrive. Now that the principle way of conveying both goods and information is on the cyberseas, the battle is over delivering goods direct to the customer as quickly and cheaply as possible without losing a ton of money in the process.

EBay yesterday announced that it was buying a four-year-old startup called Shutl that “uses a network of courier firms to deliver online orders from physical stores” in the U.K., as Alistair Barr reports in USA Today, and “was planning a U.S. launch this year, before eBay came knocking.”

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EBay, which currently offers its EBay Now service with contracted couriers, will expand from select locations in New York City, San Francisco and Chicago (where service launched yesterday) to about 25 international markets overall by the end of next year. At present, customers pay $5 for delivery of items that cost at least $25. 

Barr’s story bears the subhed, “Same-day delivery is the new e-commerce battle ground.” The eBay service “isn't meant to be a profit maker,” as the Wall Street Journalpoints out, but it’s not willing to put market share before profit the way another ecommerce behemoth has been well-known to operate.

“We don't want to lose money at it,” Devin Wenig, head of eBay's marketplace unit, tells the WSJ’s Greg Bensinger, Shelly Banjo and Jeffrey A. Trachtenberg. “It would be nice to ultimately make a little money.”

Apparently that’s a meme that reaching Seattle. Amazon.com, is making news by raising the threshold price of its minimum order for free “Super Saver Shipping” from $25 to $35 for those who are not Amazon Prime members. 

“Here is the positive way to spin this announcement: This will tempt more customers to the Prime shipping service, which charges $79 a year for unlimited two-day delivery,” suggests David Streitfeld in the New York Times. “It is thus a brilliant move by Amazon, which wants everyone to be Prime so they will buy more and more and keep raising revenue.”

“Here is the negative way: This is the biggest rollback of benefits for Amazon’s customers ever: Streitfeld continues. “Amazon incessantly talks about how it is doing more for its customers; this goes in the other direction. Customers will notice.”

The Los Angeles Times’ Shin Li reports that Paulo Santos, a trader and analyst at Seeking Alpha, points out that “free shipping ‘has long been a cornerstone’ of the company's strategy.”

In fact, “this is the first time in more than a decade that Amazon has altered the minimum order for free shipping in the U.S.,” the company blogged yesterday. “During that time, we have expanded free shipping selection by millions of items across all 40 product categories.”

“Moving this threshold is a borderline desperate measure,” according to Santos. “A measure which would only be taken if Amazon.com internally was looking at some seriously ugly numbers.”

Mashable’s Todd Wasserman is a bit gentler in reaching a similar conclusion. “This sort-of stealth increase is one way Amazon can help deliver the kind of bottom-line results that investors are seeking,” he writes. “The company has blithely ignored such cries for years, though, instead focusing on growth and pleasing consumers.”

The announcement came two days before Amazon releases its quarterly results, “when analysts often press for information about company efforts to boost profits,” observes the Seattle Times’ Jay Greene. “It also comes just as the holiday shopping season begins, when Amazon racks up its biggest sales, but also its biggest shipping expenses.”

Examiner.com’s Danny Cox writes that the news “comes right on the heels” of a Walmart announcement about its shipping fees. “In the past, so many shoppers have loved buying from Walmart as it is obvious and well-known that they always have some of the greatest deals on Black Friday,” Cox reported Monday. “One problem is that a lot of the deals almost seemed pointless due to the shipping costs.”

In essence, it’s now offering free shipping “on nearly everything*,” as it announces in large type on its website, with the asterisk translating to, in small type, “on orders of $50 or more.” Fitting. Walmart may call the doo-dad in its latest logo an “iconic spark” but it has always looked like an asterisk to me.

1 comment about "Ahoy! Amazon, EBay And Walmart Float Shipping News".
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  1. Peter Christianson from Retailigence, October 23, 2013 at 1:40 p.m.

    Brick-and-Mortar retailers should find every way possible to leverage their location strengths. Despite the popularity of online shopping, the majority of consumers still prefer to shop and buy in store. And now retailers can take advantage of emerging Reserve Online & In-Store Pickup solutions that provide shoppers with the same gratification of buying now online, plus the added convenience of being able to get their purchase in hand immediately simply by picking it up at a local retailer.

    Research has also shown that shoppers who come in store to pick up are likely to make additional purchases. Offering customers Reserve Online & In-Store Pickup in addition to e-commerce options is the best way for retailers to increase sales.

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