In another move to take a swipe at Walmart, Amazon now offers Prime Membership for $5.95 per month to Americans that are on Medicaid.
This deal on a monthly basis is a over 50 percent discount and even on a yearly plane still represents a savings of over 25 percent.
Medicaid in the US is a joint federal and state program that helps with medical costs for eligible people with limited income and resources.
Just last year Amazon offered the same deal to low-income Americans that are on food assistance programs.
This expansion of the discounted Prime Membership is a direct swipe at Walmart that due to its large retail store footprint. Also, the retailer’s marketing highlights low prices and therefore its has always been a favorite among bargain shoppers and lower-income consumers.
What is interesting about Amazon’s move is that Walmart is actually trying to move its eCommerce operation a little upscale.
Walmart made a deal with Lord & Taylor and had reportedly asked vendors to come up with packaging for products to move the price points higher. Also, the discount retailer is adding more private label fashion products, cosmetics, and home furnishings that typically bring higher profit margins.
In contrast, Amazon has a lot of the middle to upscale eCommerce customers but is working to improve its reach among lower-income consumers.
A recent rumor that it may be offering a checking-account-like service may also help to build that consumer base.
But there could be another reason why Amazon may target Medicaid recipients with this new program. Reports keep piling up that Amazon may enter the prescription pharma business.
Having Medicaid recipients as consumers could quickly help build a pharma business. The company already has many medical aid items for sale, sold by the eCommerce retailer and third-party merchants.
It would make a lot of sense for Amazon to start getting a foothold in this market by offering a discounted Prime Membership with an eye on building out a nationwide Pharma and medical aid products business.
Opportunity for Third-Party Marketplace Sellers
If Amazon can be successful in bringing Medicaid recipients to the platform, it may provide an opportunity for small businesses to offer medical supplies and medical aid items.
Therefore, for a business that already is doing business in the medical field, this announcement by Amazon could bring additional revenues.
As always, it is best to consider Amazon FBA for such a venture as Amazon customers prefer to receive items shipped from the retailer.
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