Amazon Considers Price Increase for Prime

How hooked are you on Amazon’s Prime service? You know, the one that gives you free two-day shipping on most products, free Kindle titles to borrow, and unlimited streaming video of movies and TV shows?

Amazon may test your loyalty with a price bump, adding between $20 and $40 to the $79 U.S. cost, reports USA Today.

“The company said it has not raised the price on Prime in the nine years since its launch, even though shipping costs have increased and it has added new services, such as video streaming,” reports The Associated Press.

So why boost it now?

Says USA Today:

Amazon said … that its net shipping costs jumped 19 percent to $1.21 billion in the fourth quarter. That was 4.7 percent of net sales, up from 4.5 percent a year earlier. Expenses like this contribute to the company’s wafer-thin profit margins, which have been a concern on Wall Street for years.

The proposed increase has met with celebration at Netflix, according to CNET.

We recently reported that Netflix is looking at price restructuring.

And because, as CNET reports, “online video subscribers are a price-sensitive bunch,” Netflix is hoping that the increase — which would for the first time push the monthly cost of Prime higher than that of Netflix — will drive customers to it.

CNET says:

Even at the low end, it still would raise the monthly cost of Prime above the monthly rate of Netflix. Netflix costs $7.99 a month standard; a $20 increase to the Prime yearly membership would boost its monthly breakdown to $8.25.

What do you think? Is Amazon Prime worth the proposed price? Share your comments below or on our Facebook page.

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Comments & discussion

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  • http://citizenhal.com/ Hal Brown

    If they raise it that much I drop it. With free shipping from many other stores, I am thinking about not renewing anyway.

    • Sharon

      Amaxon Prime gives you free 2 DAY Shipping. Hardly any other online store does that. Sometimes that 2 day shipping is a lifesaver!

  • DonnaD

    I have to agree… I think I would reconsider being a prime member with that much of an increase.

  • Dale

    I’d drop Prime but I certainly wouldn’t give Netflix my money!

  • Medicine-is-My-Game

    That much of an increase would cause me to drop Prime – $20 to $40 is a pretty big hike. And Netflix’s streaming is a joke.

  • Barbara Van Walsen

    I had thought about getting Amazon Prime, but I don’t buy that much from Amazon so free shipping wouldn’t be a factor in my decision. Borrowing Kindle books might be good. I read a lot of books and I am a fast reader, but the selection of ebooks to borrow might not match my interests. I “buy” free ebooks and some of the cheaper ebooks (usually the $0.99 books that have more than one story in them) and I sometimes get a special deal that allows me to buy higher priced books for $0.99. The ebooks to choose from rarely match my interests so that further reduces my belief that the books to borrow would not match my interests. I like Netflix’s movies they choose to stream, so I have decided that I won’t be joining Amazon Prime at $79.

  • thekater

    I’ve been a Prime member for a few years now. I can definitely state that I’m probably one of the reasons they want to raise their prices. If they do, there will be no incentive to remain a prime member – I can probably save that money shopping locally. As far as the streaming video. Myeh. I’m not THAT into it, anyway.

  • Sharon

    I order a lot from Amazon, so the free shipping is the main reason I have Prime. Even with the price increase I more than make up my membership fee with the free shipping savings. Basically, my Christmas orders cover my “old” membership price. I live in the “boonies” and love to cook, but often can’t find ingredients locally, so order from Amazon. Some of those food jars and packages are heavy and would cost a fortune to ship! Plus, you get not just Free Shipping, but Free 2 DAY Shipping, a huge bonus in my mind! I’ll keep my Prime, even with the price increase. I might even check out the video thing, too.

  • DQUser

    Amazon’s prices used to be very competitive but now they’re often pricier than many competitors.

  • rondele

    I have been surprised Amazon hasn’t raised the price of Prime before now. Nine years is a long time without a price increase, but $40 is way too much. $120 per year–I would think a lot of people would drop it, but I’ve talked to people who still think it’s worth it. I would like to see the rationale for $40. Why $40? If they have to raise it why not raise it $5.00 or $10.00?

  • bigpinch

    I left Netflix not just because of the cost but I also buy a lot of things from Amazon. I live way out in the country and even before I decided to get Amazon Prime, shopping Amazon was a more efficient use of my time and transportation costs than driving into town to shop. So if it cost me 25 cents more a month to use Amazon Prime, I’m still money ahead.