On Tuesday, Amazon quietly changed its pricing structure for some customers of AmazonFresh, the service that delivers fresh groceries within 48 hours. Until now, all consumers had to pay a flat $299 annual fee to use AmazonFresh, but now Prime members who live in certain ZIP codes in California can avoid the annual fee and instead pay $7.99 per delivery on top of the $99 Prime membership fee. Whether the consumer pays the annual or per delivery fee, the order qualifies only if it is above $50.
On Amazon's site, the company encourages consumers who plan to use the service twice or more a month to opt into the $299 annual fee structure. If consumers were to order from AmazonFresh just twice a month, however, the $7.99 per delivery arrangement would end up costing only about $192 per year, which is $100 cheaper than the annual fee.
And even if consumers plan to use AmazonFresh more than twice a month, the $7.99 fee could be more attractive to those who may not want to front the full $299 at the beginning of the year. So the new delivery option could be a way to ease consumers into the program, in hopes of eventually converting them to loyal users. The new fee structure could also help Amazon compete with other delivery services such as Postmates and Instacart, which offer per-delivery pricing structures.