Amazon Offers Unlimited Two-Day Shipping for $79 a Year
Online retail giant announces annual family membership plan; no minimum purchase needed.Juan Carlos Perez, IDG News
Amazon today introduced a membership program called Amazon Prime, which, for a flat fee of $79 per year, gives members unlimited, two-day shipping without a minimum purchase requirement
Amazon Prime also entitles members to one-day overnight shipping for $3.99 per item. Program members can extend these benefits to up to four family members living in their house.
"Two-day shipping becomes an everyday experience rather than an occasional indulgence," said Jeff Bezos, Amazon's chief executive officer, in a statement.
Bezos acknowledged that Amazon Prime will be expensive for the company in the short term, but he said in the statement that it will provide a "significant benefit" and convenience for customers.
Amazon.com posted solid growth in revenue and net income during its 2004 fourth quarter, but fell short of financial analysts' earnings expectations.
Earnings Announced
The Seattle company also released its earnings figures for the fourth quarter, which ended on December 31. Net revenue came in at $2.54 billion in the fourth quarter, an increase of 31 percent compared with 2003's fourth quarter, Amazon said in a statement. The online retailer exceeded the consensus forecast of $2.44 billion from analysts polled by Thomson First Call. Excluding an $85 million benefit from foreign exchange rates, net revenue grew by 26 percent during the quarter.
Meanwhile, Amazon had net income of $347 million, or $0.82 per share, up from $73 million, or $0.17 per share. For the full year, Amazon earned $6.92 billion in net revenue, compared with $5.26 billion in 2003, for growth of 31 percent. Excluding the benefit of foreign exchange rates, net revenue grew by 26 percent. Net income for the year came in at $588 million, or $1.39 per share, up from $35 million, or $0.08 per share in 2003.
Looking ahead, Amazon expects growth in net revenue of between 18 percent and 27 percent compared with 2004's first quarter. For the full year, Amazon expects its net revenue to be in the range of $8.05 billion to $8.65 billion, which would represent growth of between 16 percent and 25 percent.