Why It’s Prime Time for Amazon.com, Inc. (AMZN) Stock

Amazon.com, Inc. (NASDAQ:AMZN) stock could finally get the lift it deserves if the company’s expanding grocery business is a hit. However, Amazon.com, Inc. (NASDAQ:AMZN) will need more than fresh produce to grab a meaningful share of the $568 billion U.S. grocery market. Fortunately for Amazon shareholders, where success in groceries is concerned, the e-tailer isn’t leaving a lot to chance.

Amazon.com, Inc. (NASDAQ:AMZN)

That’s where Amazon Prime Fresh comes into the mix. In an apparent bid to replicate the success of its original Prime shipping program, Amazon recently announced a new version of the service called: Prime Fresh. As a regular Prime member, I get unlimited two-day shipping from Amazon.com, Inc. (NASDAQ:AMZN) for just such $79 a year. However, Prime Fresh now offers customers unlimited same-day and next-day shipping on more than 500,000 products and groceries for $299 per year.

So what?
This new offering is exciting for a few reasons. First, Amazon already has the logistics and infrastructure in place to easily pull off same-day delivery, whereas grocery retailers like Whole Foods Market, Inc. (NASDAQ:WFM) lack the resources necessary to offer grocery delivery at Amazon’s scale. This could be a problem for Whole Foods Market, Inc. (NASDAQ:WFM) down the road if Amazon.com, Inc. (NASDAQ:AMZN) Fresh expands nationally, particularly since Amazon Fresh offers a wide selection of organic and locally sourced produce.

Amazon’s Prime Fresh could also be a catalyst for the stock if enough customers opt into the program. Consider this, “Prime customers spend more than twice as much annually on Amazon.com, Inc. (NASDAQ:AMZN) than non-Prime customers,” according  to Wired.

This should play out even better for Amazon, thanks to its new annual membership fee. Think about it: Customers who pay the $299 for Prime Fresh are going to make sure they get their money’s worth in same-day and next-day shipping — and how do they do that? By ordering more frequently from Amazon.com. Looking ahead, I suspect Amazon.com, Inc. (NASDAQ:AMZN)’s Prime services will play a key role in the future success of Amazon stock.

The article Why It’s Prime Time for Amazon Stock originally appeared on Fool.com and is written by Tamara Rutter.

Fool contributor Tamara Rutter owns shares of Amazon.com. The Motley Fool recommends and owns shares of Amazon.com and Whole Foods Market (NASDAQ:WFM).

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!