Amazon Fresh launches in San Francisco with $299/year ‘Prime Fresh’ membership

amazonfreshsfoWelcome to the Bay Area, Amazon Fresh.

As anticipated earlier this week, Amazon’s same-day and next-day grocery delivery service is now officially available to customers in select zip codes of San Francisco.

amazonfresh212The launch in San Francisco, which comes six months after Amazon Fresh arrived in Los Angeles, offers the same options as customers in L.A. have: After a 30-day trial, those in San Francisco will need to pay for a $299 per year “Prime Fresh” membership to use the service. However, all Prime Fresh orders will come with no delivery charges on orders of at least $35.

Like in Los Angeles, the Prime Fresh program in the Bay Area also comes with the benefits of the regular Amazon Prime membership, including free two-day shipping, video streaming and Kindle book rentals.

If you are already an Amazon Prime member, you will be automatically upgraded to a Prime Fresh membership at the end of the free trial. Your Prime membership will be refunded on a pro-rated basis, and you will be charged $299 for the next year and annually after that.

amazonfresh12This is all different from the company’s approach in Seattle, where Amazon Fresh is open to anyone and includes delivery charges of $8 to $10 unless the customer places a big enough order or achieves “Big Radish” status based on volume of orders over time.

Amazon is entering a highly-competitive grocery delivery business market in San Francisco and will be up against companies like Safeway, Google Shopping Express and Instacart, a Sequoia-backed startup run by a former Amazon employee.

In the Seattle, GeekWire has found that Amazon Fresh prices are consistently higher than those at traditional grocery stores. Our price comparison of selected items at Amazon Fresh and a Seattle Fred Meyer showed prices about 14 percent higher on average at Amazon Fresh, before delivery fees.

Amazon has spent more than five years testing Amazon Fresh in the Seattle area only and finally introduced the grocery delivery business to Los Angeles in July. The program has been one of the longest trial runs in technology history, rivaling the Gmail beta in duration, which is a testament to Amazon’s willingness to take the long view. After watching failed delivery companies like Webvan and HomeGrocer, Amazon has taken its sweet time and “tinkered” with the economics to come up with a workable formula.

  • Paul_Owen

    Taylor, please explain why the annual fee is $220 higher than for Seattle Fresh customers.

    • Fepappy

      It isn’t. San Franciscans can buy prime for $79, just like everyone else.

      Prime Fresh, which only San Franciscans can buy, bundles Prime with free delivery of groceries for $299.

      This is clear from the Amazon website and the article above.

    • http://geekwire.com Todd Bishop

      Hi Paul — There’s no annual fee to use Amazon Fresh in Seattle, but we have to pay delivery fees unless we reach “Big Radish” status.

      In L.A. and S.F., Amazon is trying a different model: Delivery is free, but customers have to pay for the annual $299 Prime Fresh membership and order at least $35 worth of stuff each time. They can still get a regular Prime membership for $79/year without grocery benefits.

      It’s an interesting model, and it wouldn’t be a surprise to see Amazon apply it to Seattle retroactively if it works out in S.F. and L.A.

      Hope that helps. Let us know if anything is unclear.

      • WhizBangSolutions

        Todd – you don’t have to pay a delivery fee in Seattle if your order is over $100. You don’t need to reach “big radish” status. When You achieve “Big radish” status (by purchasing over $300 of groceries in a calendar month), you get free delivery on orders over $50 during the next month. But orders over $100 are delivered free regardless ($125 if you require attended delivery because you’ve bought alcohol or want the delivery person to leave with the totes).

  • AtariBaby

    I was shocked when I got charged $324 (with tax) after my trial apparently ran out, during which I never found myself using. This is an upper-income luxury, IMO. Definitely going to be canceling.