As Amazon boosts delivery fee, rival ShopRunner cuts costs

Online-shopping giant and low-wage warehouse operator Amazon.com used to operate as a non-profitable corporation: like the Japanese automakers of the 1970s-80s, it focused on boosting market share, and killing real-world rivals like Borders and Circuit City, instead of piling up profits or paying dividends.

But as it morphs into a media empire, Amazon.com has started raising prices. And we know where that gets you on the Internet: After boosting its two-days free-delivery Amazon Prime yearly fee to $99 from $79 effective April 19 (or $299 for same-day delivery), ShopRunner, an arm of Michael Rubin's Conshohocken-based, Alibaba- and eBay-backed Kynetic group of online companies, said it would give away a free year of free delivery from Neiman-Marcus and scores of other chain-store and clothing-supply clients, and promised to charge just $79 (its current price) for the second year.

How's that going? "We're really, really pleased at the response," says Fiona Dias, chief strategy officer at ShopRunner, told me. She won't say how pleased -- they're a private company and purposely "vague" about their existing "over 1 million" members -- but "there's a lot of zeroes" on the new sign-ups, adds Dias, who has lately relocated to Sarasota "where it's warm" to oversee ShopRunner extension. See also NYTimes account here.

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