Amazon Undercuts Wal-Mart With $25 Free Shipping

Updated on
  • Online retailer makes shoppers wait up to eight days for order
  • Wal-Mart’s free shipping on $35 gets to shoppers in two days

How Wal-Mart Plans to Battle Amazon Inc. lowered its free shipping threshold to $25 from $35, undercutting Wal-Mart Stores Inc. by $10 and escalating a battle between the world’s e-commerce leader and the world’s biggest retailer.

The new minimum shows Amazon competing for shoppers who don’t pay $99-a-year for Amazon Prime, which includes free two-day shipping on millions of items as well as access to music and video. These customers are the Seattle-based company’s most loyal shoppers. Amazon will make non-Prime shoppers wait 5 to 8 business days for free shipping on more than 50 million items.

Wal-Mart in January made a big push against Amazon Prime when the Bentonville, Arkansas-based retail giant offered free two-day shipping without a membership fee on orders of at least $35 while expanding its online marketplace inventory to include millions of items. The company last year acquired startup for $3.3 billion in cash and stock and put its management team in charge of the online operation to strengthen its e-commerce business against Amazon. A company representative declined to comment on Amazon’s price move.

“The challenge Wal-Mart has thrown down is, ‘give me free two-day shipping without a membership fee,’ which is hard for Amazon to match without refunding everyone’s $99 Prime membership,” said Sucharita Mulpuru, an e-commerce consultant. “This is the best Amazon can do without cannibalizing Prime, which is so important to its business.”

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— With assistance by Matthew Boyle

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