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They have probably never made money on Amazon Prime but observed that Prime members buy more goods from Amazon because of the two-day shipping. Simply put, the
by megaman821 15y ago
They have probably never made money on Amazon Prime but observed that Prime members buy more goods from Amazon because of the two-day shipping. Simply put, the money Prime brings in is based on the increased volume of your purchases and has little to do with the membership fee.
- wisty 15y agoI bet they make money on some people, who just don't buy much from them. But even if they lose money on Prime, they'll make it up on their margins, as you suggest. There's also a TOS, maybe they have some loopholes - http://www.amazon.com/gp/help/customer/display.html/ref=hp_primeland_resources_tc?nodeId=13819201 http://www.amazon.com/gp/help/customer/display.html/ref=hp_p... They don't guarantee squat, and not everything is eligible. Also, they can terminate the contract and give you a refund. I'm guessing that it's pretty rare though. Most people will either buy lots of stuff (Amazon's happy), or not buy lots of stuff (Amazon's happy).
- dholowiski 15y agoIt's worth considering that they may not be making money on Prime. They might be losing a ton of money, just to get consumers hooked on the Amazon "ecosystem".
- trafficlight 15y agoPrime has certainly changed my buying habits. My wife and I tend to buy a lot of small items that we wouldn't have otherwise bought. Things like a bottle of vitamins or bag of artificial sweetener. And I'll have it in 2 days which has worked well for us.