Selling everything from clothing to pocket-size cannons for your desk, Amazon is an online retailer like no other. It is also savvy about finding ways to boost income. Here are five ways Amazon gets you to spend more:
The company has access to data that allows it to analyze behavior from customers and uses the information to recommend products to other shoppers with similar profiles. This includes “frequently bought together,” and “customers who bought this item also bought” features. Amazon attributes 35 percent of its revenue to cross-selling, and that money is coming out of your pocket.
Free shipping offers
Amazon offers customers a few different ways to score free or lightning-fast shipping. However, free shipping isn’t free for Amazon, and the company has to make up its losses. The goal of the free shipping offer is to incentivize customers to pay extra for Prime memberships or get them to increase the number of items in their carts to hit the minimum.
Amazon Prime memberships
According to a report by the market research firm Consumer Intelligence Research Partners, as of April, 80 million people in the U.S. had Amazon Prime memberships. Prime members spend $1,300 a year with the retail giant, compared to non-Prime shoppers, who spend just $700 a year. But the real boost is revenue from video streaming and cross-selling, according to Fortune.
Prime instant video
Amazon Prime members have access to Prime Video, which lets them stream a number of popular TV shows and movies. Once customers get into the habit of streaming free videos, Amazon has a chance to sell them on renting or buying videos that aren’t available for free. If you are looking to save money on Amazon, try to stick to those freebie titles.
Amazon actually owns the patent for what it calls 1-Click ordering, which has generated billions in revenue for the retail giant. This frictionless ordering system is another way in which Amazon disconnects customers from how much they are actually spending and encourages impulse buying.