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Subscribers to Amazon Prime shell out $79 to enroll and then enjoy the perk of free shipping. Eating the shipping costs isn't a big deal for the company if someone's buying a book or a pair of slippers, but what about a 1,600-pound safe? MarketWatch tracks down just such a beast from the Cannon Safe company: “We charge customers around $700 to ship this safe, but when they buy it through Amazon they get it shipped for free,” says its marketing manager. "As a result, we get orders through Amazon every day.”
That sounds great for Amazon, but consider that the company posted a $636 million loss on shipping in the last quarter, writes Jeremy Olshan. And its overall net loss of $274 million would have been a "hefty profit were it not for the costs of free shipping," one analyst says. “If I were an investor paying a multiple premium for Amazon, I’d want a little more information about this." Amazon is tight-lipped on such things as a general rule, but Jeff Bezos previously has said the company views free shipping as a calculated risk, one it is happy to take.
