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100M prime customers making 5B purchases a year is $2 per purchase for 2 day shipping that costs amazon 5-8 dollars to ship. Considering amazon takes 25% cut fr

• jblow 8y ago
  Wait what? Amazon often packs multiple products into the same shipment. I assume each individual product is considered a purchase. And where do you get the $5-8 figure from? I can ship things for that much, so you’d have to assume Amazon gets a discount for massive volume.
• ikeboy 8y ago
  Amazon charges 3P sellers for the shipping and my understanding is they're basically passing through their shipping costs. For a typical $15 dollar product that's under a pound, Amazon currently charges $3.19 for shipping. Most of those can be shipped first class or even Amazon flex because it's close enough to the customer it can still get there in 2 days, and Amazon can easily pack and ship a light item for $3. If it's over a pound that fee goes to $4.71 currently (in fact the exact cutoff is 12 oz for complicated reasons). I very much doubt Amazon is losing money on any third party sales in general. The one thing they might be is when they provide Amazon funded discounts to customers, although the max they do is 8-9% and I've figured they're giving up referral fee profit rather than losing money.