[fancyketchup]

> [...] compared to the exorbitant rates [...] $8-10 shipping and handling for standard shipping [...]

So here's the thing: It actually does cost $8-10 to ship most of the types of things you can buy on Amazon. I don't know what Amazon pays for shipping, but I would be surprised if FedEx/UPS/OnTrac will even look at an Amazon box for less than $3-5 (to say nothing of transporting it).

Amazon Prime is predicated on the idea that you'll make Amazon your default retailer after paying for prime.

Being a customer's default retailer is a powerful position for two reasons. First, many customers don't shop around for the lowest price on each item (they shop for lowest basket price), so your margins don't get squeezed quite as much. Second, you don't need to advertise (as much) to these people, so it reduces your marketing spend.

As loyalty programs go, it's a very clever one.

[toomuchtodo]

> As loyalty programs go, it's a very clever one.

So reverse Costco by mail? (Costco makes all of its money on memberships; margins are fixed at a low rate on all products. The loyalty factor is still there though)