Amazon Prime - How Do They Do It?
 

A couple of years ago I joined an Amazon.com program called Amazon Prime. I pay $75 a year to be a member and as a member...I get free 2 day shipping on anything that Amazon carries or I get overnight shipping for $3.99 (per item). Because of this, I always include Amazon in my research when I'm ready to buy an item. I've bought a lot of my photography & videography stuff from them over the last few years as well as other items because they are so competitively priced and because the shipping is free for 2 day. Amazon has to be losing money on me right? I mean - I always go for the free 2 day shipping and I imagine I got my moneys worth for this membership within the first month I was a member.

For instance, I just bought an item from Amazon that was cheaper then if I had bought it from B&H Photo in NY. I paid no tax on the purchase and I got free 2 day shipping. 2 day shipping from B&H would be been about $38.

Yeah I have always wondered the same thing. I am an Amazon Prime member as well and hit them hard around Christmas time.

yes, you are going to kill Amazon, please stop before it's too late :-)

Not really...there is power in numbers. Amazon prime memberships definitely are worth it and appear to be relatively popular among Amazon members who order frequently.

Also take into consideration the very fact that when you use Amazon to shop, they already are making money from you. In reality they probably could waive the shipping fees on almost all of their orders since they pay their shipping fees in bulk as opposed to individual shipments.

In any event, customers are happy because they can find/get their products in a timely manner with an awesome, money-back/replacement guarantee. Which in turns creates loyalty (and more profits)

It's definitely worth it.

Yea - I didn't even mention that. I have had to return a few items and they made it fast and simple. Doing business with them is a real pleasure!

On the aggregate they probably make money.

I usually just go for the free 5 day shipping it usually shows up in 2-3 days anyway.