Amazon Undercuts Wal-Mart With $25 Free Shipping Threshold

Amazon lowered its free shipping threshold to $25 from $35, undercutting Wal-Mart by $10 and escalating a battle between the world’s e-commerce leader and the world’s biggest retailer, according to Bloomberg.

The new minimum shows Amazon competing for shoppers who don’t pay $99-a-year for Amazon Prime, which includes free two-day shipping on millions of items as well as access to music and video. These customers are the company’s most loyal shoppers. Amazon will make non-Prime shoppers wait 5 to 8 business days for free shipping on more than 50 million items.

Wal-Mart in January made a big push against Amazon Prime when they offered free two-day shipping without a membership fee on orders of at least $35 while expanding its online marketplace inventory to include millions of items. The company last year acquired startup Jet.com for $3.3 billion in cash and stock and put its management team in charge of the online operation to strengthen its e-commerce business against Amazon.

“The challenge Wal-Mart has thrown down is, ‘give me free two-day shipping without a membership fee,’ which is hard for Amazon to match without refunding everyone’s $99 Prime membership,“ said Sucharita Mulpuru, an e-commerce consultant. “This is the best Amazon can do without cannibalizing Prime, which is so important to its business.“