Jan 19, 2018

Amazon Prime Membership rose nearly 20%

Amazon Prime memberships are getting more expensive — for those customers who want the flexibility to pay for the speedy shipping and media streaming program on a monthly basis.

The company is announcing on Friday that the Amazon Prime monthly fee is increasing from $10.99 to $12.99 in the U.S., an increase of 18 percent. The new price works out to nearly $156 a year.

The increase comes less than two years after Amazon first introduced the monthly payment option as a way to attract new Prime members who either couldn't afford the annual membership of $99, which is not increasing, or didn't want to commit to using the service continuously.

As I wrote this summer:

The monthly payment option was seen as a way to attract lower-income customers — the type of shopper who might otherwise prefer, say, Walmart — who could not cough up $99 at one time. Since then, Prime membership growth has been the strongest among households making less than $50,000 annually, an R.W. Baird study found.

Prime is the engine at the center of the Amazon commerce machine — Prime members buy from Amazon more frequently than non-Prime members and also spend more, hence why Amazon introduced the monthly option to lure new members. So if the company is raising the fee, you can bet that it discovered the current $10.99 was just not sustainable.

"Prime provides an unparalleled combination of shipping, shopping and entertainment benefits, and we continue to invest in making Prime even more valuable for our members," the company said in a statement. "The number of items eligible for unlimited Free Two-Day Shipping increased in recent years from 20 million to more than 100 million items. We have expanded Prime Free Same-Day and Prime Free One-Day delivery to more than 8,000 cities and towns. We also continue to introduce new, popular and award-winning Prime Originals...Members also enjoy a growing list of unique benefits like Prime Music, Prime Reading, exclusive products and much more."

Translation: this stuff is really expensive.

The price of Amazon's monthly Prime program for students, which just launched this past fall, is also jumping 18 percent — from $5.49 to $6.49.

At the same time, the cost of a monthly Prime Video membership, which doesn't include shipping benefits, will remain at $8.99; the monthly Prime membership option for customers on government assistance will also remain unchanged at $5.99.


Recode

by Jason Del Rey