Amazon is offering a premium service at a reasonable price. We are members of Amazon Prime for several years now. It is not only free shipping, but guaranteed two business day shipping. You may get super saver free shipping on orders $25 or more, but you will have to wait 1-2 weeks to receive your package. Big difference. Thursdays are best because I will sometimes receive packages on Saturday. =)
I think Amazon’s cost to ship is not as high as we may think. They have their warehouse infrastructure in places like Arizona, Nevada, and Tennessee which allows them to deliver packages to most people within two business days via Ground service anyway.
From Goodyear, AZ 85338:
From Fernley, NV 89408:
From Brush Creek, NV 38547:
If you match up the UPS Ground rates with the 2010 Census population density by County, you can see that Amazon can deliver to many densely populated areas within two days.
Their volume further allows them to negotiate good rates. I read here that at their peak, they were processing 41 orders per second in year 2005: http://money.cnn.com/2005/12/27/technology/holiday_amazon/index.htm
Another added benefit is that you can watch many Amazon Instant Video for free. We watch it on our Roku which allows us to cut our Cable TV subscription.