“The price of ‘free’ two-day shipping is about to go up,” Marcus Wohlsen reports for Wired. “hat was the message from Amazon executives last week, who said that shipping costs would probably force them to raise the price of the company’s popular Amazon Prime program. Now $79 per year, the cost could go up $20 to $40 more.”
“Judging from Amazon’s balance sheet — and Wall Street’s negative reaction to those balances after its most recent earnings report — the company really has no choice. The irony is that Amazon Prime has worked out just like Amazon wanted it to,” Wohlsen reports. “Unlike most companies, Amazon hasn’t had to worry much about its near-total absence of profits. While Apple’s share price wavers despite pocketing tens of billions annually, Amazon’s stock jumped by nearly two-thirds last year after ending its fiscal 2012 in the red.”
“What investors do care about, however, are sales,” Wohlsen reports. “As long as Amazon keeps growing into the world-dominating retail giant that Bezos aspires to become, Wall Street has seemed content. But its $25.6 billion in fourth-quarter sales reported last week missed analyst expectations by about $400 million. Worse, sales aren’t growing as fast as shareholders would like. After reporting its results Thursday, investors finally spanked Amazon shares with an 11 percent loss.”
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