Amazon Prime Prices Set to Rise

Amazon announced this week that it will be increasing the price of its popular Prime service. As CNN reports, a year-long subscription will cost $119 starting May 11th for new customers while the higher price won’t affect renewing customers until June 16th. This marks a $20 increase from the previous price of $99 a year.

News of this price hike comes soon after Amazon finally confirmed that it had over 100 million Prime users worldwide. This was actually the first time the company had announced any membership numbers for the service. It should also be noted that Amazon raised the monthly subscription rate earlier this year, hiking the fee from $10.99 a month to $12.99.

During a conference call with investors, Amazon CFO Brian Olsavsky said the decision to raise the price of Prime was made because the company has added new perks to the service, including what he calls “digital benefits.” This is likely a reference to Amazon’s efforts to grow to their Prime video platform, which has resulted in them garnering Emmy and Golden Globe nominations for some of their original programming. However there are also some lesser-known digital offerings bundled with Prime, such as unlimited photo storage.

Of course the star of Prime in the minds of many customers is still Amazon’s free two-day shipping (or even faster in some markets). To that point, Amazon has steadily increased the number of Prime-eligible items over the years. According to CNN, Amazon had 20 million Prime shipping items on the site four years ago, while that number tops 100 million today.

Aside from the monthly subscription price change, the last time Amazon raised the price of Prime was back in 2014. Before that the service was only $79 a year. Since then Olsavsky says the company has seen “rises in cost” related the service, necessitating the increase.

While Amazon’s announcement that the price of Prime would be going up was surely unwelcomed among consumers, their stock price was up 7% in after-hours trading following the reveal. Although some of the site’s 100 million subscribers may call be calling it quits over the increase, the undeniable convenience of the service may make it hard for some users to part ways with it. Additionally, thanks to their Prime Video service, the $119 subscription could be compared to the price of Netflix or Hulu, with Prime actually proving to be the cheaper option for many users (not to mention the shipping element). With that, it seems that Jeff Bezos and company know exactly what they’re doing with this latest price hike and will likely still be able to grow that 100 million subscribers figure in spite of it.

I am a senior and on social security do I get a break on my prime membership

Comments are closed.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Amex Launches Digital B2B Payments Platform Business Link

For consumers, these days, there's no shortage of peer-to-peer apps they can use to move money, with some popular examples including Cash App, Venmo, and Zelle. As for businesses, the list of options for sending money to vendors may be more limited. Now, a well-known credit card company and small business supporter is introducing a new platform for this purpose. This week, American Express announced the launch of Amex Business...

Carbon Credit API Cloverly Joins Visa's FinTech Partner Connect 

Last year, Visa introduced the FinTech Partner Connect program to the United States, with the goal of introducing institutions to vetted startups that could help them expand their product offerings. Now, the latest company to join the program is Cloverly. Founded in 2019, Cloverly is an API for carbon credits, allowing businesses and consumers to help fight climate change. As the company points out, with the Visa partnership, Visa clients...

Prosper Announces $75 Million Growth Capital Financing

A long-admired FinTech has added some new capital to its coffers and it continues to grow after more than 15 years in business. Recently, Prosper Marketplace announced that it had closed a $75 million debt financing round. This capital came from a fund managed by Neuberger Bergman and will be used to help Prosper meet the demand for its loans, credit card, investment products, and more. According to the company,...