The Power of Free Shipping - Amazon Prime Explained

THE POWER OF FREE SHIPPING AN EXPLANATION OF amazon Prime LET'S SET THE STAGE – WE KNOW amazon is HUGE: IN 2010 amazon HAD kindle $34.2 BILLION IN WEB SALES. THAT'S ENOUGH TO BUY EVERY PERSON IN THE UNITED STATES A kindle.. (Not to mention the $48.08 billion they racked up in 2011) ...AND STILL HAVE MORE REVENUE* LEFT OVER THAN FOUR OF THEIR CLOSEST COMPETITORS COMBINED. BEST Walmart.com BestBuy.com Target.com Overstock.com Amazon.com $4.09 Billion $2.50 Billion $1.33 Billion $1.09 Billion $34.2 Billion Kindles for 307 million people ($79/each) $24.3 Billion $9.01 Billion $9.95 Billion *2010 online sales IN 2005, AMAZON INTRODUCED amazon Prime HELLO my name is amazon Prime $79 SO HOW HAS IT BECOME SO POPULAR? per year BECAUSE MORE RETAILERS ARE OFFERING FREE SHIPPINGI HERE'S A LOOK AT THE PERCENTAGE OF TRANSACTIONS DURING THE HOLIDAYS THAT OFFERED FREE SHIPPING: 2009 2010 2011 44% 51% 63% ANYONE SEEING A TREND HERE? AND CONSUMERS SEE THE VALUE IN FREE SHIPPING: Mt 46% OF CUSTOMERS WILL CANCEL THEIR ONLINE ORDER IF FREE SHIPPING IS NOT OFFERED. BUT THAT'S NOT ALL... 75% OF CUSTOMERS WILL PURCHASE MORE WHEN FREE SHIPPING IS OFFERED TO THEM. BUT IT IS EXPENSIVE FOR THEM TO SUBSIDIZE SHIPPING COSTS: 2011 2010 2009 $2.44 Billion NET SHIPPING COSTS $1.38 UP Billion $849 Million SO HOW DOES AMAZON MAKE THIS WORK? amazon Prime Ş79/year THE SHIPPING IS... PRE-PAIDI PRE-PAID SHIPPING INCREASES A CONSUMER'S AVERAGE SPENDING BY 3X! SCODO D FEDERAL RESERV NOTI ONITEDSTATES OFAMER (CA A1 100 ONE HUNDREDIDOLLARS $24.98 $75.31 AVERAGE PURCHASE BEFORE JOINING AMAZON PRIME AVERAGE PURCHASE AFTER JOINING AMAZON PRIME IT ALSO INCREASES THE AVERAGE NUMBER OF ORDERS MADE BY 2X! BEFORE AFTER 0.73 2.32 SO DO CONSUMERS VALUE PRIME? 90% OF PRIME USERS PLAN TO RENEW AT THE END OF THEIR SUBSCRIPTION. 2005 AMAZON PRIME LAUNCH IN US AT $79 ANNUALLY 2007 AMAZON PRIME LAUNCH IN JAPAN, UK AND GERMANY DECEMBER 2007 SEARS LAUNCHES SHIPVANTAGE 2008 AMAZON PRIME LAUNCH IN FRANCE 2009 AMAZON PRIME REACHES 2 MILLION MEMBERS (THAT'S JUST SHY OF THE POPULATION OF HOUSTON, TX) SEPTEMBER 2010 AMAZON MOM LAUNCH NOVEMBER 2010 WILLIAMS-SONOMA RESERVE LAUNCHES FEBRUARY 2011 amazon.com Instant Videos AMAZON INTRODUCES PRIME INSTANT VIDEOS BORDERS FILES FOR CHAPTER 11 JULY 2011 BORDERS Everything MustG SALE BORDERS CLOSES STORES COING SALE NOVEMBER AMAZON INTRODUCES KINDLE LENDING LIBRARY amazonkindle Library ca 2011 KINDLE FIRE SHIPS WITH A FREE MONTH OF AMAZON PRIME DECEMBER GOOGLE PRE-PAID SHIPPING RUMORS START 2011 Did you hear what Google is doing? AMAZON PRIME REACHES 5 MILLION MEMBERS JANUARY 2012 AMAZON TEMPORARILY SUSPENDS ACCEPTING NEW MEMBERS FOR ITS FREE AMAZON MOM PRODUCT, REDUCES DISCOUNT ON DIAPERS AND WIPES AND REQUIRES AMAZON PRIME MEMBERSHIP BOTTOM LINE: WITH THIS KIND OF SUCCESS, SSHOULDN'T EVERY E-COMMERCE SITE HAVE A PRE-PAID SHIPPING PRODUCT? QUESTION IS: WILL YOU? (we didn't just make this stuff up) Sources www.internetretailer.com/top500/list www.online.wsj.com/article/SB10001424052970204083204577082731595543136.html www.marketwire.com/press-release/Successful-Retailers-Use-Sales-Email-Promotions-Free-Shipping-Attract-Shoppers-1560467.htm www.ycharts.com/companies/AMZN/profit_margin www.paidcontent.org/article/419.for-amazon-sharehold ers-prime-boosts-costs-and-trashes-profits www.shopsanity.com/the-cultof-omazen www.amazonstrategies.com/ www.practicalecommerce.com/articles/3043-Amazon-Prime-5-Million-N f-amazon-prime-some-numbers /05/how-big-is-amazon-prime.html Members-20-Percent-Growth www.gourmetinsideronline.com/gi/links/news/news.aspID-91 www.transportation.zibb.com/trademark/shipvantage/30493687 www.en.wikipedia.org/wiki/Amazon.com le/SB100014240527A8Z03373404576147922340434998.html te0042/052702303661904576454353768550280.html www.online.wsj.com/article/SB10001 www.online.wsj.com/article/SB10001424052702303661 www.engadget.com/2011/11/02/amazon-prime-adds-new-reading-option-with-kindle-owners-lending www.online.wsj.com/article/SB10001424052970204012004577072323400561792.html www.facebook.com/amazonmom http://www.businesswire.com/news/home/20120131006866/en/Amazon.com-Announces-Fourth-Quarter-Sales-35-17.43 Amazon, Amazon Kindle and Amazon Prime are registered trademarks of Amazon.com, Inc. All other company names and trademarks are the property of their respective owners. None of these entities participated in the creation of this infographic. Courtesy of the fine folks at Clarus Marketing Group, home of: freeshipping.cm 6. freeshipping.net