Walmart’s (NYSE: WMT) Sam’s Club is pushing out free shipping for most of its products it sells online with no minimum purchase. The new initiative directly competes against giant distribution companies like Amazon.
Sam’s Club sells variety of products in-stores and online similar to Walmart but more in bulk deals. The free shipping will be excluded from fresh and frozen food, bulk items and products sent via third party, which poses a concern because groceries account for majority of Sam’s Club’s revenue.
The free shipping option will be only available to Sam’s Club’s “Plus” members, which costs $100 annually, which is essentially the same as Amazon Prime’s one time price or monthly payment totaling $99 annually.
But the difference between Amazon and Sam’s Club is that Sam’s Club does not provide a set time frame products will be delivered for, as opposed to Amazon Prime who offers guaranteed two-day shipping. Eventually, Sam’s Club is hoping to guarantee one or two shipping for most of its products.
Sam’s Club new move is to increase membership count, as the company recently shut down over 10 percent of its locations suddenly. Although the company had closed down a large percentage of its locations, they will be used for distribution and fulfillment centers.
Sam’s Club opened its first eCommerce fulfillment center in Memphis, Tennessee. The company expects to ship its first package from that center early his Spring. Afterwards, the company plans to launch centers at Texas, Central Florida, Southern California, the Mid-Atlantic, Chicagoland, and the Northeast.
The retailer also simplified its membership structure by reducing the number of memberships from three to just two: club and plus. Club members or formerly Sam’s Savings used to pay $45 annually, but the price has been marked down to $40 annually.