Look at the post office package shelves, the boxes left at people’s doors and the empties stuffed into the trash and it’s clear that Wrangell — just like the rest of the country — is primed to shop from Amazon.
Free shipping is the biggest incentive to sign up for Amazon Prime. That, and the website sells everything anyone could ever want or need, plus millions of items we never knew we wanted or needed. And maybe don’t need, but free shipping is such an enticement.
No minimum purchase, no hassles, just click and wait for delivery. Let Amazon, or the many vendors that sell on the website, pay the FedEx, UPS or post office charges.
Sort of.
Amazon is not a charity, and Prime is big business.
Some analysts estimate that Amazon has more than 153 million Prime accounts in the United States — the company does not report the actual number. That’s the equivalent of almost half the U.S. population, though many of those accounts are businesses or government agencies.
Amazon recently raised its annual subscription price for Prime to $139 — more if you pay monthly, and less if you are a student or receive public assistance such as Medicaid.
Roughing it out on the back of the largest envelope available from Amazon, making several uninformed assumptions about how many Prime subscribers pay annually or monthly and how many students and Medicaid recipients take the discount, and it adds up that Prime membership fees could pump maybe $20 billion into Amazon’s bank account this year.
That’s almost as much money as ExxonMobil earned in all of last year, when it enjoyed rising oil prices.
That’s almost as much money as Alaska Air Group, the parent company of Alaska Airlines and Horizon Air, generated in operating revenues in all of last year, when Alaska was the fifth largest airline in the country.
That’s about how much Taco Bell hopes to collect this year from sales at its 7,500 restaurants around the world.
Nothing against Amazon for priming its own pump with the super-selling idea in 2005. It has turned out to be a brilliant marketing tool, driving tens of millions of people to spend an average of $30 billion on the site every month last year, according to analyst estimates (Amazon does not say).
It’s interesting to note that the revenues from Prime membership fees were equal to most of Amazon’s net income from all of its operations last year. Take away those Prime fees, and the company would be a lot less profitable. Take away free shipping, and the company would ring up a lot less in sales — proof that Prime is the biggest thing in retail shopping since more U.S. stores started opening on Sundays half a century ago.
What it all means for Alaska — and for Wrangell, where about 10% of the community’s retail spending was online last year — is that Lower 48 Prime members unknowingly subsidize our orders. All that free air shipping costs Amazon a lot more to the 49th state than elsewhere, but we pay the same Prime membership fee as anyone in Detroit, Des Moines, Denver or Disney World (which is sort of like a city unto itself).
So, a big thank you to Lower 48 Prime members for helping to send dog food, diapers, 10-pound bags of nuts and printer ink cartridges to our door. Their membership fees help make life more affordable in Alaska.
It’s just too bad all that free shipping helps send 10% of Wrangell’s retail spending out of town.
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