We talked earlier this week about Amazon’s potential plans to increase the cost of its Prime service, which provides unlimited two-day shipping along with a slew of other benefits for a $79 per year fee. Now technology-focused rival Newegg is entering the fray with Premier, a $50 per year service that also offers members free expedited shipping.
Available now with a 30-day free trial, Newegg Premier promises free shipping “in 3 days or less,” plus discounts on two-day and next-day shipping options. The company is also waiving shipping and restocking fees for returns within an item’s eligible return period, offering a “dedicated” customer support team, and promising to provide members with early bird notifications on sales and events, along with exclusive deals.
Although Newegg has greatly expended its retail variety in recent years, the company still primarily offers computer hardware and electronics, meaning that only customers who intended to purchase mostly these items should consider the new membership. Amazon also carries computer components and electronics but, at least in terms of the former category, Newegg generally offers a much wider selection of products.
But there are also other factors to consider as well if comparing the two services. While Amazon Prime offers the same steep discounts on next-day shipping as Newegg Premier, the company’s standard free shipping level for members is two-day shipping, compared to “3 days or less” for Premier. Customers near Newegg’s warehouses in California, New Jersey, and Tennessee will likely receive their packages quickly, but Newegg simply can’t compete with Amazon’s extensive distribution network.
Another major factor are the bonus media services that Amazon includes with its Prime membership, such as instant streaming TV shows and movies and free Kindle books via the Kindle Owners’ Lending Library. Newegg has nothing along these lines to offer members, with its service focused exclusively on the shopping and shipping experience.
With the benefits offered by Amazon Prime, the company loses money with most members based on the membership fee alone, but reports indicate that it more than makes up for the difference via increased orders from Prime members. While it’s unclear at this point if Newegg will lose money based exclusively on the yearly fee, it is also counting on capturing the same increased revenue from members that Amazon enjoys.
However, with Amazon poised to raise the Prime membership fee in the coming months, and Newegg Premier already about $30 cheaper per year, the new service may indeed prove popular among those for whom computer hardware is frequently represented on their monthly credit card statements.
Warehouse image via AnandTech