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Amazon unveils flat-fee shipping

The move comes as the e-tailer tries to convince investors it can build customer loyalty in the face of growing competition.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
Amazon.com on Wednesday launched a flat-fee shipping program, in a move to offer an alternative to its minimum purchase requirement for low-cost delivery.

Under its Amazon Prime program, customers pay a flat annual membership fee of $79 for unlimited two-day shipping for up to four members in the same household. Members can also pay $3.99 for overnight shipping.

"Amazon Prime takes the effort out of ordering: no minimum purchase and no consolidating orders," Jeff Bezos, chief executive of Amazon, said in a letter posted on the company's Web site. "Two-day shipping becomes an everyday experience rather than an occasional indulgence."

The move comes as Amazon tries to convince investors that it can increase customer loyalty in the face of growing competition from eBay and traditional retailers. The company on Wednesday reported quarterly results that missed analyst expectations, sending shares down more than 13 percent in after-hours trading.

According to the terms and conditions of the program, products sold by third-party vendors or in third-party areas like Amazon marketplace, auctions or zShops are excluded. Heavy or oversized items also may not be eligible. Corporate accounts or purchases made for a business or institution will not be allowed entry to the program.

It remains to be seen whether the Prime program will undermine the company's Super Saver program. Under that program, customers receive free shipping when spending at least $25 on goods that will be delivered to the same address.

Membership to the Prime program will automatically renew each year, unless customers cancel their membership before its renewal.