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Thu Apr 26 2018 23:05:37

Amazon Raises Annual Prime Membership Fee to $119

By: Ina Steiner

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Amazon is raising the cost of an annual Prime membership in the US from $99 to $119 effective May 11th for new members and beginning June 16th for renewals. The company announced the fee change in a call with analysts to discuss its first-quarter financial results.

Amazon started out the year with remarkable growth. In the first three months, its North American net sales rose 46% compared to the first quarter of 2017. That's nearly double the growth rate it saw in North America in the first quarter of 2017.

International net sales, which were half that of North American sales, rose 34% - compare that to the 16% growth it saw in the first quarter of 2017. 

Third-party sellers are a beneficiary of Amazon's strong quarter. Worldwide paid units grew 38%, and sellers comprised 52% of unit sales.

When asked about the accelerated revenue growth seen in North America for the quarter, Amazon Chief Financial Officer Brian Olsavsky said the general driver continued to be Prime and the Prime flywheel. Amazon sees better engagement among Prime users especially for digital benefits, and "that's always good news for eventual sales of other things."

He also said Amazon is selling premium Prime services such as subscriptions to Music and Kindle Unlimited programs. 

But Olsavsky also noted the cost of Prime. "We continue to increase the value of Prime including speed, selection, and digital entertainment options. The value of Prime to customers has never been greater. And the cost is also high, especially with shipping options and digital benefits. We continue to see a rise in costs."

He also noted that Amazon Prime saw a single increase in March of 2014. "Four years ago when we last increased the cost of Prime, you could get 20 million products within 2-days. Today you can get over 100 million products within 2 days and many, many, many products within 1 day, same-day, or 2 hours," he said.

"We continually added new features, it's a different program than in 2014."

The CFO said Prime was still "the best deal in retail" and said Amazon works to make it better and better each day.

Many shoppers have come to rely on the marketplace. When Amazon recently cracked down on buyers, many were frantic, describing how much they depended on being able to get goods online.

Among the reactions to the fee increase from customers on Twitter: "I'm good with the $119 I suppose but I miss when 2 day delivery actually meant 2 day delivery. I've had prime long enough to remember when they delivered on Sundays." Another customer responded, "I hear you. It's irritating when Amazon lists an item as Prime, & then when checking out, it'll show shipping time as taking 5-7 days. WTH list it as a Prime item?"




Comments (23) | Permalink

Readers Comments

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: Rexford

Fri Apr 27 06:31:20 2018

Laughing at the sense of entitlement in the last paragraph.  If you need something that badly un-glue yourself from your barcalounger and drive to a retailer and get it.  If you live in Barrow, Alaska or near the Bonneville Salt Flats of Utah you will just have to wait.

This increase should make them a bundle. Whether it is worth it to a buyer is a completely different story.  That's a substantial increase.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

by: pace306 This user has validated their user name.

Fri Apr 27 10:24:22 2018

Theres an EBAY lesson here - why doesnt eBay see it?

Prime covers alot of things - but it covers SHIPPING too.

Coercing sellers into "Free shipping" (as if it doesnt cost anything) is fraud and fake - not to mention disgusting.

NOTHING is free. Amazon is raising PRIME to cover its costs - tv, movies, shipping etc.

eBay expects sellers to give PRIME level service and charge NOTHING (eat the shipping).

And you wonder why DW Dorkmiester gets in a huff when asked questions by Wall Street.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: iheartjacksparrow

Fri Apr 27 11:06:44 2018

It's only a $10 increase. I've been a Prime member for years, and they are constantly adding perks for the members. We get free movies, music, on-line books, and shipping. I probably watch over $100 worth of movies each year, so I have no problem with the price increase.  

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: RKTOYS

Fri Apr 27 11:23:05 2018

The sort of "free" offered through Prime is more like free rentals than free products.  I would rather pay for something I can keep than perpetually rent with nothing to show for it.  Also I don't think their shipping is anything to write home about.  I'll pay somebody else for timely service thank you very much.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: toolguy

Fri Apr 27 12:05:14 2018

@ iHeartJack

"It's only a $10 increase."

It's going from $99 to $119

That's $20 or just slightly over a 20% increase!

That's a HUGE amount in my book. . .

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: iheartjacksparrow

Fri Apr 27 13:21:18 2018

@Toolguy - As the recalled Barbie doll said: "Math class is tough."

I still can't complain for what I receive in return. And unlike RKTOYS, I would prefer to not have more stuff cluttering up my house. It already looks like a warehouse instead of a home with all the items I have in my store that are in boxes, file cabinets and shelving units.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: RKTOYS

Fri Apr 27 15:36:35 2018

You'd be surprised how many DVD cases fit on a single bookshelf (several hundred).  Plus they don't disappear if you have to cancel services or there's a licensing squabble.

I know what you mean on the house looking like a warehouse though.  Poor performance online doesn't really help with that either.  Local shows, thankfully, are removing a few cartons at a time.  A Switch game here or there is practically a rounding error.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: FidoMaster

Fri Apr 27 17:03:23 2018

I'm with Jack-the-sparrow on this one, there's a ridiculous amount of value that we derive from Prime.

I hate to say it, but we'd probably pay $199 a year and still be happy (shhh, don't tell Bezos plz, I heard he's a little hard-up for cash at the moment).

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

by: RL15 This user has validated their user name.

Fri Apr 27 17:09:18 2018

even with a $20 yearly increase, I will still get my moneys worth. amazon gets almost all my online business, so the "free shipping" costs I save pays more than the fee charged.
the streaming movies and music has a large choices.
amazon prime is fairly priced for all it offers.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: toolguy

Fri Apr 27 20:47:00 2018

I got a year of Amazon Prime for free when I signed up for Frontier Cable.

I don't watch Prime, neither does my wife but my son does. (we have Netflix)

i NEVER buy anything from Amazon no matter what the circumstances are! (neither does the wife)

Now my son being the millennial he is he could care less who who he buys from be it Amazon eBay or Newegg, He has no alliances with any ecommerce sites.

I don't see myself renewing my subscription when it runs out in December. I just don't see the value for me, i DON'T use it. . .

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

by: DingDong This user has validated their user name.

Sat Apr 28 08:18:48 2018

I guess I don't get it. I live a very simple life.
Why would you pay for membership to watch TV all day (basically) when there is free tv.

Yes, I still have a landline and dsl, free tv and I still have plenty of time to do all my gardening, shopping, hiking, crafting, and such without the having constant stimulation.

I love the new health issues of bent neck and back because of staring at the cell phone. Most people probably don't know that they are getting bad service at a store or diner because their faces are in downward position.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

by: TomH This user has validated their user name.

Sat Apr 28 10:01:39 2018

Not all of us who use Prime frequently are in a position or able to go shopping with ease to a local store that may or may not have the item/s looked for. It may in fact entail several stores and hours.

I don't like the increase, but I'll keep my Prime account.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

by: OnlyPollyPocket This user has validated their user name.

Sat Apr 28 10:57:52 2018

I think a 20% increase in one shot is pretty aggressive but I agree with all of those who say it is still well worth it.  I EASILY get that much value in free shipping not counting, music, movies, etc.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: toolguy

Sat Apr 28 11:14:50 2018

@OnlyPollyPocket

"I EASILY get that much value in free shipping not counting, music, movies, etc. "

There is NO such thing as FREE shipping!

You paid $99 for that so called "free" shipping and that cost is going up 20%

As far as the music and movies they can be had for little or no cost if you know where to look on the internet. . .

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: Rexford

Sat Apr 28 13:25:14 2018

All that really matters is is that based on comments here, the Prime members seem to value their Prime memberships and they are willing to pay for it. They feel like they are getting their money's worth.  No one is forcing the service onto anyone so I'm good with it.  Good job Bezos.  

I never mind paying for something when I feel like I am getting my money's worth.    Just the opposite of my eBay fees.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: FidoMaster

Sat Apr 28 19:14:44 2018

So such thing as free shipping?

Here's my itemized Prime breakdown as proof:

Bosch Season 1 $20.00
Bosch Season 2 $20.00
Bosch Season 3 $20.00
Amazon Prime Music $20.00
Prime Unlimited Photo Storage $10.00
Prime Audible Books $9.99
Amazon 2-Day Shipping FREE
Woot  Shipping FREE
Prime Pantry Delivery FREE

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: windsorbear

Sun Apr 29 00:30:57 2018

I don't use it enough to justify the increase.  I'll be canceling.  

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

This user has validated their user name. by: RKTOYS

Sun Apr 29 07:57:42 2018

toolguy is right though.  One, you pay $120 annually for "free" shipping.  Two, the cost of "free" shipping is merely shifted into higher item prices.  People that have sold via e-commerce, let alone subjected to eBay's constant pushes for "free" shipping, should know better.  It's not a question of whether you like the arrangement or not.  The shipping isn't really free.

Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

by: Snapped This user has validated their user name.

Sun Apr 29 12:38:34 2018

(Captain) Obviously if one doesn't 'use' a service, it's 'value' diminishes to zero for that party.  I don't use it either, but can still see the 'value' for those who do.

And though it's a 20% raise, that physically equates to a whopping real dollar cost change from $8.25/mo. to $10/mo.  That's 5.83(forever) cents a day.  Not to judge the importance of that for any given wallet.  Then again, if one can afford the hardware and then the 'products' available via it's use to begin with (and again - duh) actually uses it, then any judgement left relates to value of return for cost.

And what does that cost cover?  'Average' ship cost (embedded or not) of about 1.5 purchases a month.  Less if the 'true' ship cost is more.  And what does 'general ship cost' imply?  Typical 2-3 day delivery.  

But with Prime, that can also 'include' overnight, same day, or practically 'instant' over an expanding range of products daily.  Can't get all that for a set price anywhere else, 'free' or not to 'free' - which seems to be the question, eh, Will?

And that doesn't even count the other elements comprised.

Finally, can anyone out there actually show a transaction case where the buyer DIDN'T wind up paying all seller cost's in one way or another, no matter the venue?

Unless the seller was 'giving' something for nothing of course.  Or offering a measurable 'discount deal' that accepts a 'partial' payment of those costs as incentive and/or 'reward' for loyalty and volume.  Say, like some kind of 'membership' for example?

Obviously.


Perminate Link for Amazon Raises Annual Prime Membership Fee to $119   Amazon Raises Annual Prime Membership Fee to $119

by: Moonwishes This user has validated their user name.
Web Site

Mon Apr 30 03:18:48 2018

I was a bit stunned by the increase until I started thinking it through for our family/business. I share the prime account with my son, so he can order products on Amazon and not have to pay for shipping as well as being able to buy gifts for his brother and SIL and have them sent directly to them.

I also have gifts sent directly to my other son and DIL and soon the baby that will be joining them :). Because I am disabled some things are just terribly inconvenient to go shopping for so over the years, I buy more and more on line, and knowing for most items I don't have to pay for shipping it makes it even more worthwhile for me. I'd rather the PO delivers it straight to me home than me having to heave things into the car and then take them back out. Last time I bought printer paper, I had to shang-hi a customer in the parking lot at walmart and ask him if he would pick up the box and put it in the car for me. So as things get heavier for me to pick up, the better deal 'free' shipping is to me.

I also calculated what I used to pay for shipping envelopes and what I pay now that I have changed sources. Just the cost of my envelopes and UPS delivery was more than what I am now spending with the help of Prime. So just for supplies for my business, Prime makes sense.

I also get a free kindle month every month and if I ever get caught up in all my reading, I can borrow books and magazines for free as well. I don't listen to much music, and I have no clue how to use my Prime account for movies. I think you need a 'smart' TV which we don't have so that isn't of any use for me.

So I think I do get get my money's worth out of the membership. But I ran the numbers to be sure.

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