Shipping Bloodbath or Revolution?

Amazon has announced some stunning news today – free shipping for all:

Amazon.com Inc. is introducing free shipping on thousands of popular, smaller items — makeup, mobile phone accessories, earplugs — in its Web store, without requiring a minimum order.

Quite extraordinary, free shipping could be considered both genius and very risky for Amazon and generally for online retailing.If breaking even is the objective, it will certainly not aid the profitability of Amazon and other retailers that follow suit. But off course customers will love it and perhaps this is driving the move.

Nevertheless, I think merchants should be careful before considering such a strategy, not everyone has access to the kind of preferential shipping rates and resources in general that a company like Amazon has.

For context from the same article:

“Maybe the thinking is they can break even on these transactions and that’s all they really need to do,” said Sucharita Mulpuru, an analyst at Forrester Research Inc. “That fits the Bezos playbook.”

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