the problem with amazon is that even though it is not a profitable component, it costs more in shopping on average than what the program costs, but they have found that the prime users purchase more on the program
There are also secondary benefits of Prime, they are shifting packages from ground residential, which is traditionally a low-margin business to 2nd-day air. I'd expect the increased leverage over their shippers when renegotiating rates is significant.
I wonder how much of their 2-day is actually sent 2-day? Several times I've hit the $4 for overnight and it still came ups ground. I'd imagine at least half of the products ordered are within 2 day ups ground from an amazon warehouse.
