Why Amazon Prime Is Offering Free Same-Day Delivery

24/7 Wall St.

Jeff_BezosJust last week Wal-Mart Stores Inc. (NYSE: WMT) announced a free shipping service for its customers willing to pay $50 a year. The offer was clearly a swipe at Amazon.com Inc.’s (NASDAQ: AMZN) Prime delivery service that offers free two-day shipping plus a host of other services for $99 a year. Thursday, Amazon kicked off free same-day delivery on orders of $35 or more in a dozen U.S. metro areas.

Last week, just a day or two before Wal-Mart’s announcement, Amazon said it had added one-hour delivery from local stores in Manhattan to its list of cities with the one-hour delivery service. Amazon Prime members get free two-hour delivery in these same cities. The one-hour delivery service from participating local stores costs $7.99 per order.

Why does Amazon keep raising the bar? Very likely for the same reason that the Saudis are pumping more oil than ever even though the…

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