Correction: We have received an email from Amazon containing corrections to our explanation of its Ship by Region program.
According to Amazon Prime's Julie Law, Amazon Prime members will continue to receive unlimited free two-day shipping on items shipped and sold by Amazon and items sold by merchants through Amazon's fulfillment service.
Under the experimental Ship by Region program, local merchants can choose to ship their items for free to buyers located within a certain region, thus increasing the product choices for customers and allowing local sellers to reach more buyers, as long as they can guarantee free two-day shipping to buyers in that certain region.
No limits on free shipping will be placed on Amazon Prime subscribers, who pay $99 every year for this benefit, among others. The original story contains an error that states that Prime members will no longer receive free unlimited two-day shipping.
Amazon Prime is experimenting on a new program that will allow merchants to determine certain locations where they are willing to ship items that have no fees attached.
Under the new program, merchants will be allowed to list items as Prime-eligible even if such items are not housed in Amazon warehouses. In the past, items will only earn a Prime-eligible designation when it is shipped first to an Amazon warehouse.
Under the original $99 Prime program, merchants would ship items such as large-screen TVs for free and that shipping will be fulfilled in two days or less. Such benefits enjoyed by Prime members have been the strong deciding factor for people to sign up for a subscription.
However, the new program introduces the idea that some goods may no longer be eligible to be shipped for free. Dubbed Ship by Region, the program allows sellers to decide which regions they're willing to ship their items to for free.
This means that even if the customer signed up for Amazon Prime, Amazon cannot ensure free shipping all the time, especially for items that are located too far from him. Amazon seems to have launched the program to expand the number of items that show up when customers search for goods at Prime.
In the meantime, Amazon is also looking into a different shipping program that enables customers to receive multiple orders on a single day within the week. Called Amazon Day, the program is designed to reduce shipping costs by combining several orders using fewer boxes and then scheduling a delivery on the same day.
Amazon Day is still under the "studying" phase with no information yet on when it would be ready for testing. Likewise, the Ship by Region program has no time frame yet on when it could start a more extensive rollout.
Records during the second quarter of the year show that shipping expenses increased 29 percent to $2.34 billion, surpassing the company's total operating expenses which had an increase of 17 percent.
