Amazon to decide soon on free shipping

The online retailing giant will announce later this month whether it will continue its popular but expensive promotion, CEO Jeff Bezos said at the Consumer Electronics Show.

David Becker Staff Writer, CNET News.com
David Becker
covers games and gadgets.
David Becker
2 min read
LAS VEGAS--Amazon.com will announce later this month whether it will continue its free shipping promotion, CEO Jeff Bezos said Friday.

Speaking at a media briefing at the Consumer Electronics Show here, Bezos said the promotion, which began in July and gives customers free basic shipping on most orders above $25, has been popular but expensive.

"It's effectively a major price reduction," he said. "We've had it in place long enough to collect a lot of data about how it affects customer behavior, and that's how we'll make the decision."

Amazon will announce during its quarterly earnings conference call Jan. 23 whether it will continue the program, revert to the previous policy of free shipping on orders $49 and above, or move to a price point somewhere in between.

"We're always going to have free shipping," Bezos said. "Customers get what customers want, and they've been very clear that they want free shipping."

Bezos declined to give figures on how much the expanded free shipping has cost Amazon, nor would he reveal sales data for the holiday shopping season. But he labeled the season a success based on other measures, such as 20 percent less customer contacts per order than a year ago and a substantial drop in "Where's my stuff" queries.

"From a customer experience perspective, it's the best Christmas we've ever had," he said.

Bezos said he wasn't particularly worried about possible plans by America Online to set up an online storefront, similar to Amazon's zShops, for small businesses. Nor was he sweating about Froogle, the new comparison-shopping service from search engine Google.

"I've been asked for at least six years, 'How can you guys make any money on the Internet with the pricebots (automated price comparison sites) out there?'" Bezos said. "My answer has always been, yeah, it's one of the things that makes our job challenging, in the same way gravity makes Boeing's job challenging...What we have to do is offer the best customer value proposition we can, and we'll come out favorably in those comparisons."

Bezos also continued to pitch the Segway electric scooter, saying that since Amazon began taking advance orders for the pricey gadget, it has consistently ranked among the top 200 items in the store's electronics category. "I can assure you there are no other $5,000 items on that list," he said.