PSA: Amazon Will Increase Price of Prime To $119 (cnbc.com)

EzInKy writes: Effective on May 11, Jeff Bezos says the price of Prime membership will increase to $119 from $99. Now, as much as I have enjoyed the free shipping over these many years, I just don't believe that benefit outweighs the increased cost of membership. Existing Prime members will have until June 16 to renew their membership at the current $99 price-point, notes CNBC. In its first quarter earnings call, Amazon attributed the price increase to the service's rising costs, noting that this was its first price hike since March 2014.

Comments

$10/month

[indytx]

So, $10/month for unlimited, free 2-day delivery which often includes Sunday delivery along with streaming video is too much for the poster?

Re:$10/month

[Desprez]

Is this surprising? That different people have different needs? If you don't order that often, it's a net loss.

I tried prime a while back when it cost even less, and it wasn't worth it for me. Their streaming content was mostly available elsewhere, and their interface was much worse than others, while constantly trying to shove additional-cost content in my face.

Re: $10/month

[AmiMoJo]

Prime is one of those services that relies on most people not getting their money's worth from it. It basically amortises the cost of two day shipping over everyone using it. Some will win, some will lose.

In the UK it's worse than that though, because most items eligible for Prime cost more anyway. It usually costs the same to buy the non-Prime version and just pay for next day shipping on top.

I get the impression that the selection of stuff available in the US is much better too, especially since they bought that grocery chain.

Re:$10/month

[Mitreya]

All I want is a version of Amazon prime that is just for fast shipping. I really don't need the music or streaming service

Ok. Instead of $10/month, you can have a $9.93/month service with just the shipping.
Shipping is the only one that costs money per-customer. Digital items are a fixed cost that is amortized among many millions of existing subscribers.

Re:$10/month

[registrations_suck]

Amazon says the +$20 is due to the increased budgets for content creation, acquisition and delivery. Seems reasonable that if that is the case, then only the people who want those services pay the +$20.

Personally, I watch the "free" Prime Video because it is there anyway. I don't give a shit about it. If Amazon offered Prime without it, at a savings of $20 or $30 or more, fuck yeah, I'd sign up for that "Prime Lite".

Re: $10/month

[SlaveToTheGrind]

In the UK it's worse than that though, because most items eligible for Prime cost more anyway. It usually costs the same to buy the non-Prime version and just pay for next day shipping on top.

The math may be mildly better than that in the US, but not by much. I call it the "Prime tax."

Re: $10/month

[ArmoredDragon]

About that -- Amazon doesn't do quick handling anymore. These days, it's pretty rate that Amazon ships my stuff on the same day, sometimes waiting as long as 3 days to ship it, thus making my 2 day shipping more like 5 day shipping. The last eight or so orders I've made have taken no less than 4 days. Their excuse is that they give you two day free shipping, but that doesn't mean they have to actually ship it the same day. Holidays are understandable, but we're well outside of the busy shipping season.

Meanwhile, they keep adding these gimmicks, like a streaming video service that is basically a pay per view service with an attached monthly fee while much of their content is offered at a flat rate on netflix, hbo, hulu, and others.

Re: $10/month

[Holi]

Interesting you say that. Since Amazon has been relying on their own logistics in my area I have found that their delivery has gotten far worse.
Overnight orders delayed by several days(FBA not SFP so no blaming 3rd parties) .
Prime orders not making the 2 day delivery time
Orders of Prime listed items defaulting to non prime sellers , often with no warning.

I make no claim how it is in your neck of the woods but around here, even with a warehouse in spitting distance, Prime seems to be losing its luster.

Re: $10/month

[ArmoredDragon]

An annoying thing with Amazon's free shipping, is that they'll just sit on it for up to 3 weeks before shipping it. They're starting to do this with prime as well, though not quite as long. I honestly can't recall the last time that my prime order was shipped the same day or at least the day after. Occasionally, in the past, I would get my two day order the very next day, especially if I ordered on a Sunday, but they only delayed it if the item was back-ordered, which is fine. The most recent items they shipped me (two certificate frames, which by the way came in two separate packages, one taking an extra day) I had to wait 5 days before getting it. Amazon says their service only guarantees two day shipping, but that doesn't mean they have to ship it within two days. Meanwhile, newegg, jet, walmart, target, and a few others I've ordered from, all ship within 24 hours still, even with their free shipping options.

Re: $10/month

[Miamicanes]

Power & Water is a bit of a reach, as is healthcare SERVICE. Prescription drugs, however, are ripe territory for poaching. Amazon has the capital resources to do things like find foreign suppliers for semi-commodity drugs sold in the US whose supply has tightened due to mergers & acquisitions, then pay to get those foreign suppliers FDA-approved in return for making them beholden to Amazon thereafter. Walgreens & CVS have lots of market power, but Amazon can out-spend them on capital investments with barely a blip on their balance sheet beyond the next quarter.

Re: $10/month

[Wycliffe]

Prime is one of those services that relies on most people not getting their money's worth from it. It basically amortises the cost of two day shipping over everyone using it. Some will win, some will lose.

They probably have a few people who don't get their money's worth but that's not their main business plan. By having an upfront sunk cost, they are actually hoping that once you have a membership that you order everything from them. That's exactly what most people I know who have prime do. That are ordering almost everything from amazon so amazon breaks even on the shipping and makes it up with the increased volume.

Re: $10/month

[Wycliffe]

Meanwhile, they keep adding these gimmicks, like a streaming video service that is basically a pay per view service with an attached monthly fee while much of their content is offered at a flat rate on netflix, hbo, hulu, and others.

You don't need to be a prime member for their pay-per-view content. Prime Video works the same as netflix. You have a bunch of videos you can watch for free. The difference is that unlike netflix not everything available to stream is free. Their free selection is very comparable to netflix The problem I have is that especially with kids, having it mixed together tempts you to pay for the non-free stuff and their non-free stuff is way too expensive.

Re: $10/month

[I4ko]

I have also seen this. I've lived in areas with amazon warehouses, and unless I pay for the same day shipping, where I will have the order arrive next day, the two-day delivery on prime will take 5 days at least, because amazon will sit on their hands for 3 days before doing the picking of the order.

Re: $10/month

[apoc.famine]

I think that's a logical conclusion, but it might not be the correct one.

Prime could be a loss leader, but Prime members could buy substantially more products because of the benefits it provides. I don't know enough about Amazon's finances to know whether or not that's true, but I also don't know anyone with Prime who doesn't use it heavily.

It's entirely possible that it doesn't directly make Amazon money, but instead ups their sales volume.

Re:$10/month

[sexconker]

Digital items are a fixed cost that is amortized among many millions of existing subscribers.

Nope. For content they license they have to pay per subscriber or viewer. They may negotiate a flat fee for a limited duration license available to all, but the price negotiation includes such things as "How many subscribers do you have?" and "How many people watched our show last year?".

And for the content they produce, well, Jeremy Clarkson doesn't come cheap.

Re: $10/month

[pr0fessor]

I live in the rural midwest it's nice I can go outside and enjoy without a bunch of people, traffic, pollution, crime, etc... unfortunately that also means either I settle for what is local or order things on-line. Free two day shipping to the middle of nowhere and streaming service for $119/year sounds like a good deal to me.

Re: $10/month

[DamnOregonian]

Haven't had this problem. Not even anything close, and I am a very heavy use of both Prime free shipping (delivered to my local 7-11 Amazon Locker) and Prime Now. I'd say me or my girlfriend have a few things shipped per month (not including the recurring shipments, like filters), and Prime Now a couple times a week.
I'm in Seattle, so I don't know if that makes any difference. But the average time between me ordering something, and driving down the street to 7-11 to pick it up, is about 2 days.

IF you don't buy a lot at Amazon, and don't stream

[Salgak1]

. . . probably not worth it.

On the other hand, if you're like **our** household, buy quite a bit, and quite often, from Amazon, and stream their Included-in-Prime video content, 10 bucks a month is dirt cheap.

So the question is, does Prime meet your needs for the price charged? IF so, get it. IF not, don't. It's THAT simple.

Blue Origin has become more expensive?

[Anonymous Coward]

Uh-oh, Jeff's hobby hiking in price?

Re:IF you don't buy a lot at Amazon, and don't str

[Malenx]

There's more to it. I love Prime and have had it since it'd debut. We still order goods of amazon weekly, if not more. However, when I first got Prime, the landscape for competition was much different than today. Amazon's success has driven competitors to follow suit and offer free / expedited shipping, reducing the value of Prime. Now they are increasing the cost and justifying it by tacking on extra services.

That's great if you use those services, but consumers that don't are seeing an increase in price and a reduction in value.

I'm personally not sure if I'll renew given I'm on of those in the middle.

The devil in the details

[jmd]

https://www.marketwatch.com/story/amazon-earnings-more-than-double-sending-stock-toward-record-highs-2018-04-26

From the article: "Amazon.com Inc.’s massive growth just grew even more massive in the first quarter, as the e-commerce giant reported Thursday that profit more than doubled and sales continued to accelerate, and the company announced an increase in Prime subscription prices that should add even more."

Profits double and Amazon raises Prime membership fees. Why? Because they can.

Re:The devil in the details

[WankerWeasel]

Bezos just announced last week that they have over 110 million Prime subscribers. So an extra $20 a year means potentially another $2.2 billion in their pockets. Sure, they'll lose a few but the number that drop the service over the increase but the vast majority won't. I'd be surprised if even 5% didn't renew because of it.

Re:The devil in the details

[SlaveToTheGrind]

Just to be clear, the number of profit dollars more than doubled, not the profit margin . Revenue went up significantly as well, as you can imagine.

Net profit went from ~2% last year to ~3% this year. Unexpected oopsies can soak that up real quick.

Another fun way to think about it is that $1.6B net profit was about two tenths of one percent of Amazon's $738B market cap. Increase that by another 10-20x and they can actually start thinking about paying a dividend.

Re:IF you don't buy a lot at Amazon, and don't str

[turp182]

My wife stumbled upon our order history in Amazon recently, we place a Prime order about every 3 days (for at least the past 2 years).

Prime is worth every penny for us.

We do watch more Netflix than Amazon streaming, but Amazon is where we purchase things rather than our crappy cable provider - AT&T.

Now we know why

[goombah99]

SpaceX had to raise prices for NASA,

Re:IF you don't buy a lot at Amazon, and don't str

[houghi]

If it is yours, it is stuff. If it belongs to other people, it is shit. So: "You seem to buy a lot of shit."

Re:PSA?

[cascadingstylesheet]

What does PSA in the headline mean?

Public Service Announcement

Re:Walmart.com has 2-day free shipping

[WaffleMonster]

Well, Amazon has free shipping too if you meet the minimum order. No membership dues.

That's the whole point of Prime (the shipping portion, anyway), you get the free shipping without needing the minimum purchase.

The point is not free shipping in a vacuum. It's that Wal-Mart offers 2-DAY FREE SHIPPING. The same deal as Amazon except without prime membership requirement.

Amazon's idea of free shipping without prime means they'll sit on your order for a week before contemplating shipping it ground.

The minimum purchase threshold is not something I find valuable so I don't care and strongly disagree with assertion it's the whole point of prime. The whole point of prime in my view is 2-DAY FREE SHIPPING not circumvention of minimum order requirement. At least I've never heard anyone say they got prime because of minimum orders. They always talk about shipping speed. I'm sure for some this is a valuable consideration yet probably not for the majority of prime subs.