July 31, 2007

QUITE SOME TIME AGO, I WROTE about signing up for “Amazon Prime” and how the free shipping changed my online shopping habits. (More here). Now this piece from USA Today suggests that I’m not the only one:

Investors saw the launch of Amazon Prime as the latest manifestation of Bezos’ fixation on free shipping, a profit drainer. They hammered Amazon (AMZN) shares down to $30 two years ago after the Seattle company began offering the unlimited free two-day shipping service for a $79 yearly fee.

“Wall Street hates it when we lower prices, give away free shipping, and offer Amazon Prime,” Bezos said in an e-mail interview. “But we know in our bones that siding with the customer pays off for everyone in the end.”

Now, Prime is starting to look like a linchpin to Amazon’s remarkable run of increases in quarterly sales — and investors no longer appear kerfuffled. After the online retailing giant last week reported a singularly sharp rise in sales for its second quarter, its shares shot up 25%, topping $86 — a seven-year high.

Plus, encouraging people to shop online is environmentally friendly!