I have a small ebay business and I ship over a thousand packages a year via USPS. The vast majority of the items I sell are between 2-6 lbs. Shipping per package to US locations costs me from around 5.30 to 15.00 according to weight and distance. Average per package is right about 8.00 a package. UPS and FedEx rates are similar or a little higher on average.
If I pay prime 100 I can order my ass off for food, sundries and household goods and I pay no additional shipping charges beyond the 100.
How is this possible? I know how much real world shipping costs and if Amazon wants to make like Walmart and be your grocery store and household goods store that’s dozens of shipments a year, often for items that weigh a lot more than the ones I cited above. I don’t see how that $ 100. is going to pay for all that.
The main answer to date is “Amazon’s magic logistics allow them to do that”. It’s not really a satisfactory answer. Shipping is expensive. $100 worth of shipping would be eaten up in a month or less by someone really getting into the prime ordering lifestyle. It seems like a huge money drain.
What’s the catch?