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Photo: Julie Clopper / Shutterstock.com
Photo: Julie Clopper / Shutterstock.com

A new shipping program being offered by Amazon is causing some customers to panic, leading them to worry that fewer items will qualify for free two-day shipping in the future.

Gizmodo’s headline declared: “Amazon Prime Is About to Get Worse,” and CNNMoney cautioned: “Amazon to limit free two-day Prime shipping.”

https://twitter.com/jdinsmore/status/638712777075462144

But an Amazon spokeswoman says this is not true, and in fact, thanks to the program, more items will qualify for free Prime shipping.

“These are blatant mischaracterizations of a program that is excellent for both businesses and Prime members,” Amazon’s Julie Law said in a statement sent via email. “In fact, Prime members nationwide continue to receive unlimited Free Two-Day Shipping on more than 20 million items. This remains  unchanged, which is counter to these stories.”

So, what is Amazon doing?

It is testing out something called “ship by region,” which allows local merchants to list items as Prime eligible, even though they will only have to ship the items to a designated area within the normal two-day window — rather than nationwide.

By allowing merchants to choose a particular region, they can better predict the cost of shipping and the amount of time the item will take to arrive on someone’s doorstep. If they were required to ship to the entire country, for instance, these merchants may never make their products eligible for Prime.

amazonprimeMore importantly, the test does not apply to the 20 million items currently eligible for Prime. Today, nearly all of those products are shipped and stored in one of Amazon’s own warehouses. Amazon just started experimenting earlier this year with allowing some merchants to ship Prime-eligible products directly to its members. It is these merchants who are getting early access to the program.

The Wall Street Journal first reported on the new “Ship by region” program last week, but in subsequent stories, some of these details were lost.

The program is logical because some of these small and local merchants would never be able to afford to offer free two-day shipping nationwide — a pair of shoes is much cheaper to ship from California to Washington than it is to send them from New Jersey.

In fact, the experiment is reminiscent of what Jet.com is doing. The startup, which is competing directly with Amazon by offering lower prices, uses a number of tactics to slash prices. One such approach is to find items that will ship most economically to you. Other marketplaces, including Amazon, don’t always do this and instead promote retailers based on other factors, including the merchant with the best price or reputation.

This week’s small panic underscores one thing for sure: How much customers have become accustomed to being able to get free, two-day shipping from Amazon.

Correction: An earlier version of this story said that some Prime shipments for customers could take longer than two days to arrive, but that is not the case. Members within a delivery area for sellers testing this program will see added Prime selection and members outside the coverage area will not see Prime as an option for these items.

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