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Why Amazon Prime customers buy items at prices higher than retail

Amazon customers pay for convenience and fast shipping.
Amazon customers pay for convenience and fast shipping.

It's a strange phenomenon. Especially during the holidays. Why do Amazon customers pay more on than they would for the same item at Walmart, Target, a grocery store, or other big box store? It seems crazy to most people, but Amazon sellers know the answer, and they are cashing in big.

  • The Amazon Prime account. This account requires a yearly subscription of $79 and offers perks including free 2-day shipping on items in the Amazon warehouses, free Amazon Instant Video, and a free monthly Kindle book as part of the Kindle lending library.
  • Convenience of fast delivery to their home or place of business. Many customers are using the Prime Account to order common household goods like health and beauty items, pet products, and groceries for a very specific reason. They may have a physical limitation such as illness or a disability that prevents them from driving, shopping, or carrying items. Amazon is the perfect answer with millions of products they can have shipped to their home in just 2 days. Busy professionals love the convenience of Amazon Prime, and really, who wants to go to Walmart anyway? Order what you need on your tablet or mobile phone, and sit back and relax. It will be at your door in two days.
  • Lack of shopping in their geographic area. Millions of Americans live in rural areas where the closest Walmart or grocery store is hours away. (Visit Wyoming or Montana sometime.) In areas like this, grocery shopping takes a monumental effort. planning, gallons of gas, and the better part of a day to accomplish. But UPS and USPS deliver to those rural homes 5-6 days a week. That's worth paying for. On the other end of the spectrum, people living in big cities who rely on public transportation have to carry their purchases home on a bus or subway. Those folks can order heavy or bulky items, or weekly groceries, on Amazon and have them delivered to their door.
  • Time savings. Consumers are leveraging the power of the internet to obtain hard to find items or specialty products not available in their area. Maybe a loved one wants a specific gift for his birthday, and the three Walmarts in your area are out of stock. Instead of wasting time driving around trying to locate the item, or spending time checking stock levels online before you go to the store, purchase on Amazon. Or maybe you are in search of a specialty food item due to a new diet or medical condition. Order it on Amazon instead of searching for it all over town. Time is everyone's most valuable resource. Amazon Prime customers understand this and are more than willing to pay a premium to get desired products.

Not all buyers are price-sensitive and will pay more for better and faster service to get what they want. Keep this in mind the next time you purchase something on Amazon because you can't find it in your area or you just aren't up to standing in line behind Bubba at Walmart.

More information on Amazon Prime:

Top 5 ranked condoms on Amazon - Order online for privacy and fast shipping

Top 3 grocery items to sell on Amazon

Small and mighty - pay attention to small packages

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