Amazon announced that beginning today, they will offer one- and two-hour grocery delivery to Prime members in certain geographic areas for no additional cost. Prime members, who pay a $119 annual membership fee, previously had to pay an additional $14.99 per month for the Amazon Fresh same-day grocery service.
The free delivery service for Prime members is available in Philadelphia and to the approximately 2,000 markets where Amazon delivery already exists.
Although the delivery service will be costly for Amazon – the company expects to spend an additional $1.5 billion in the fourth quarter to make one-day delivery a reality – the company’s goal is to mitigate costs of shipping over time by selling more, increasing efficiencies, and negotiating better deals with suppliers.
Amazon brought in nearly $5 billion in the third quarter from subscription services, including Audible, Spotify, Prime and Amazon Fresh. Subscription revenues are up 6% compared to the second quarter and 34% from the third quarter of last year.