Amazon.com offers annual rate for shipping

Online retailer Amazon.com launched a new shipping program Wednesday that offers unlimited two-day shipping for customers that pay an annual fee.

In a message posted on its Web site, the Seattle-based company said its new service, called “Amazon Prime,” provides “all-you-can-eat” express shipping for customers who pay an introductory $79 annual fee. Members of the program can also upgrade to receive individual orders by overnight shipping for $3.99 each.

Normal shipping rates on Amzaon.com are $9.48 for two-day shipping of a single book to $16.48 for having the book delivered overnight.

Amazon.com also said Amazon Prime can be used to ship such purchases as books, DVDs, music, electronics, kitchen appliances, tools, health and personal care. The company said members will be able to share the benefits of the new shipping program with up to four members of their household. There are no minimum purchase requirement and no need to consolidate orders, the company added.

The announcement, which came just hours ahead of Amazon's key fourth-quarter earnings report, indicates the Internet retailer is likely to continue its aggressive sales policy. Recently, Amazon.com introduced free ground shipping on purchases of $25 or more for select items. But some analysts are worried that the Web-based retailer is paying too large a price to encourage sales growth.

Patty Smith, a spokesperson for Amazon.com, said the company expects Amazon Prime to be a large expense for the company in the short-term. “But over time, we expect this to drive incremental demand, just as super saving shipping has driven demand,” she said.

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