Amazon Hikes Cost Of Prime Membership By 25% To $99

Tyler Durden's picture

We wonder just what hedonic adjustments the BLS will use to explain away the implied inflation from this 25% increase in Amazon Prime membership fees. Prefunding the cost of friendly drone deliveries (which Tesla may soon desperately need if it wants to sell its cars direct)? We also wonder, just what the impact on Prime membership will be considering the disastrous results that Netflix suffered when it did a comparable price hike a little over two years ago, which it promptly reversed when people started abandoning the service in droves. Just how elastic is Amazon pricing? We are about to find out.

From Amazon:

We are writing to provide you advance notice that the price of your Prime membership will be increasing. The annual rate will be $99 when your membership renews on October 28, 2014.

 

Even as fuel and transportation costs have increased, the price of Prime has remained the same for nine years. Since 2005, the number of items eligible for unlimited free Two-Day Shipping has grown from one million to over 20 million. We also added unlimited access to over 40,000 movies and TV episodes with Prime Instant Video and a selection of over 500,000 books to borrow from the Kindle Owners' Lending Library.

 

For more information about your Prime membership, visit our Prime membership page.

 

Sincerely,

 

The Amazon Prime Team

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DOT's picture

Cost of lunch in DC or NY

Pladizow's picture

WTF is a prime membership?

GetZeeGold's picture

 

 

If you have to ask.....you can't afford it.

imaginalis's picture

Just cancelled my auto-renewal. 

AlaricBalth's picture

This should help.

Amazon. The company with a profitless business model. :-)

And then there’s Amazon Prime, which offers customers free two-day shipping for a one-time annual fee of $79 (now $99) and is another loss leader affecting fourth-quarter estimates. Amazon is characteristically hush-hush about its profits (or lack of them) from this program and won’t even disclose how many customers are signed up for the service.

But the number of Amazon Prime customers is growing. According to a recent survey of 300 Amazon customers by Consumer Intelligence Research Partners (CIRP), Prime had 16.7 million members at the end of September, or 40 percent of Amazon’s customers, up from 9.7 million the year before.

http://chart.gurufocus.com/1384644993698.png

kaiserhoff's picture

Correct.  The current price is $79.00

Prime customers are notoriously price insensitive, ie  rich bitches, but occasionally small businesses who want rapid shipment of office supplies, etc.

I'm not a fan of Bezos, or his business model, but this helps distinguish amazon from e-bay which is a turtle speed, ignorant cluster fuck.

Incubus's picture

i'm a rich bitch?

 

news to me.

 

 

kaiserhoff's picture

No, just price insensitive. The urban/rural split is poorly understood.  When I lived in DC I handled a lot more money, but saved almost nothing.  Those comparisons are worth looking at.  Arbitrage is the new "in the black;)"

Bioscale's picture

What is price insensitive on paying an annual fee for free shipment within 2 days? Btw, when I was looking at Amazon web site recently, there is PRIME everywhere, I got the feeling there are some more advantages resulting from the membership, aren't there.

 

SeanJKerrigan's picture

As a student (or a man w/ a .edu email address), I get it for $49, up now from $39.  A fair enough price for free 2-day shipping and $4 next day shipping.  I don't use the video service though. Bleh.

Weisshaupt's picture

I am rural. I wouldn't say I am price insensitve in any way.  But since I am rural, I buy a lot of stuff from Amazon.  It saves a 60 Mile round trip drive to do so.  Seen the price of gas?  Say I take my little zippo communter vehicle, which gets 40mpg.  Okay so that is  $4-6 in gas.  If I order 20 times a year from Amazon, which I do, then this is pretty much a no brainer just on gas costs. .  Also, the 2 day shipping is really nice when you are working on a project you want to get done and you can get the part or tool or whatever and get one with it.  Add in the free streaming and kindle library, and there is $10+ a month I don't spend on Hulu or Netflix, and who knows how many $ I save when the kids are looking fora new book to read.. or, more commonly, leave the book they were supposed ot have at school.... 

Do I want the price to go up to $100?  heck no. Do I still think its a good deal at that price? Yes. If my economics and local choices were different would I still think so?  Maybe not.  To be sure, price goes up, demand will go down, and a lotta people will not re-up. . Its that simple.  

 

 

 

 

RobertC's picture

I live in suburbia...and have been a Prime subscriber since 2005.  I avoid the malls whenever I can; free 2 shipping and LOW cost Saturday let me experiment with items and ultimately return what I don't use or need.  Amazon Prime video is becoming my goto source for kids video that Netflix has lost rights to.  It runs on my Roku's, Blu-Ray players smart TV's and tablets...prime offers free shipping for 40# sacks of my pets favorite dog food...

 

But the no-brainer reason: My sisters and brother pay for my account, since you can include 4 family members under 1 prime account.  I'll take that for a $100!

Incubus's picture

i'm a rich bitch?

 

news to me.

 

edit: TWO POSTS FOR THE PRICE OF ONE

Colonel Klink's picture

You must be a ZH Prime member!

Uncle Remus's picture

Back when I switched to Prime, I did it based on the then current Netflix pricing and movie viewing. The shipping was icing. Now, with brick & mortar becoming almost untenable for some types of retail, the shipping has more relative value in the package. I question the value on the video side. And the lending library? A joke.

foodstampbarry's picture

You get your cheap chinese shit in two days instead of 3-5 days. It helps to keep the sheep sedated while Rome burns.

Billy Sol Estes's picture

Shut your whore mouth I by my anarchist literature off of Amazon.

ElvisDog's picture

Sometimes Amazon can be really useful. My wife wanted 100 Watt incandescent bulbs for her bathroom. Can't find those in stores any more, but you can get them on Amazon.

post turtle saver's picture

hell cost of lunch in backwater hilljack smalltown...

this is a non-story and I've voted as such... don't use percentages to whip up frenzy over a raw increase that amounts to a rounding error... that's obvious and pathetic

pasttense's picture

"Cost of lunch in DC or NY"

So $99 for 250 lunches a year comes up to close to $25,000/year.  I'm sure your girlfriend or wife will be quite willing to make you sack lunches to take to work--as long as you spend most of the savings on her.

RobertC's picture

"Welcome Prime members...We heard about the recent price increase and wanted to help. We are offering a limited time FREE 1-Year membership exclusively for Amazon Prime members who have not yet renewed their membership at the higher rate here: http://bit.ly/1qzyuGQ.

Thanks and we hope you enjoy your ShopRunner experience! Erin G., ShopRunner Social Media Team Member"

holmes's picture

Bye, bye Prime. Didn't use it much anyway.

ParkAveFlasher's picture

How am I gonna tell the kids they can't have their favorite Wild Kratts episode on demand any more?

 

pods's picture

Oh damn they have the Kratts on there?  What about Zoboomafoo?

Those were shows I actually wanted the kids to watch.

pods

ghostfaceinvestah's picture

Get a Roku and get them for free from the PBS Kids channel.

playnstocks's picture

This is the email they sent me: 

Dear  , 

We are writing to provide you advance notice that the price of your Prime membership will be increasing. The annual rate will be $99 when your membership renews on March 9, 2015.

Even as fuel and transportation costs have increased, the price of Prime has remained the same for nine years. Since 2005, the number of items eligible for unlimited free Two-Day Shipping has grown from one million to over 20 million. We also added unlimited access to over 40,000 movies and TV episodes with Prime Instant Video and a selection of over 500,000 books to borrow from the Kindle Owners' Lending Library. 

For more information about your Prime membership, visit our Prime membership page.

Sincerely, 

The Amazon Prime Team

Cursive's picture

@playnstocks

 

WTF?  Does Bezos not read the CPI release?  There is NO inflation.

playnstocks's picture

I think he meant "The Weather"  LOL

dobermangang's picture

I never used it.  Most of my orders(shipped free) still make it within 2 to 3 days after ordering.  

Toolshed's picture

Yep. Many of the amazon merchnats have started free shipping to compete with Amazon's prime service. I think amazon has made a serious error by raising the prime membership rate.

scrappy's picture

Agreed.

 

I have it, but my strategy is to get my stuff, and then ditch it.

 

Expect lower results.

 

Price hikes in this economy is unwise.

 

I plan to use my wish list as a guide, a free service to buy elsewhere. Just got my last must have items from them.

HardAssets's picture

Lots of little expenses you don't notice or pay much attention to, they just renew automatically. But pricing it near a hundred bucks and charging once a year will get peoples attention. Bye bye prime.  They'll probably lose prime customers and product sales.

zhandax's picture

I have a couple of months to think about Prime.  XM was nice, but the receiver had crapped out when renewal came up and it was too cold to install the new one.  I realized they had gone up 50% from the $10/month initial rate, so they got punted.

Bosch's picture

Still worth it.  Saves on gas + keeps my wife out of Target & Costco. 

centerline's picture

Way worth it.  You can't beat the prices in most cases.

Prime means free shipping on lots of items.  Saves on automotive expenses (gas, wear and tear, etc.) and time.  I check Amazon first before entertaining going anywhere.  My wife uses the free books thing.

CH1's picture

I use Amazon (not Prime) because:

  1. It's easy.
  2. Incredible sellection.
  3. It stiffs the state out of sales taxes.
Miffed Microbiologist's picture

Enjoy it while you can. Cali closed that avenue of pleasure for us. We have found a few ways around it. Still is worth it even with the increase.

Miffed;-)

zhandax's picture

We got shafted on that one as well.  Amazon built a distribution center about 20 miles from here with some tax deal where they get the break in return for charging us (in state) sales tax.

JP McManus's picture

My state just ended #3.  It will make Prime less valuable.  But considering my local retail selection is a choice between WMT, TGT, and LOW, I don't think I really care which corporate behemoth takes my FRNs.

malek's picture

Ahem - but you are aware you can get free shipping without prime too, if you wait til you have $35+ worth of things together and plan ahead so you can accept the 5-8 days shipping time?

Oldballplayer's picture

I agree with you guys.

When i order stuff, i generally save 5-10% off the best competitor--if I can get the product locally.  Then, saving $5 for every order...the $99 break even is pretty fast in this household.

Everyone's mileage may vary.

If you do not see value in it, don't buy it.  Its the same with Costco membership, AAA membership, etc.

Its not a tax.

Miffed Microbiologist's picture

Have to agree. Prime is fabulous. We buy all our basic sundries,supplies and supplements this way. We have tracked our purchases and definitely have saved money. I manage it so we never are over stocked. This may be due to no impulse buying which I have a tendency to do.

My husband is the only one who shops costco because he is very impulse buy resistant. I asked him to pick up blueberries the other day at Costco and that's the only thing he brought home. We have agreed it is Aladdins Cave for me so, if we are there together I must stay in the car and hang out here and he just purchases items off our list. Sometimes the key to a good relationship is just admitting your problem and letting the other pick up the slack. I don't know how 2 people could manage a life together if they both shared this unfortunate attribute.

Someone told me that the best place to see couples fighting was in the Costco parking lot. Cringe.

Miffed;-)

centerline's picture

Funny stuff Miffed.  I can't get through a grocery store for less than $30.  If I am hungry at the time, double that.  lol.

clooney_art's picture

You sound gay.

The zerohedge cocksuckers can ban me again. I am done with this shit site.

GMadScientist's picture

That's nothing compared to the 'hedonics' of watering the service down. It's pretty meaningless now; other than perhaps as a ransom you pay to make sure your stuff doesn't ship even more slowly.

HardAssets's picture

"That's nothing compared to the 'hedonics' of watering the service down. It's pretty meaningless now; other than perhaps as a ransom you pay to make sure your stuff doesn't ship even more slowly."

I notice more items considered "Add On Items" that you can't order unless the totals run to a minimum amount. Don't know if theyve increased the number of items under that category or if it just happens to be what I've needed to order recently. It also seems that they take longer to ship and it takes longer to get to me. 

ghostfaceinvestah's picture

They have definitely increased the items, many items I used to buy Prime are now Add On.  I will be one of those dumping Prime once it comes up for renewal, I don't use it as much anymore, I find Walmart.com (of all places) beats Amazon on price a lot these days, and for most items I can afford to wait until a)I have $50 or more to buy (to get free shipping from Walmart), and b)wait for more than two days for shipping.