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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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Thu, 03/13/2014 - 09:07 | 4542417 DOT
DOT's picture

Cost of lunch in DC or NY

Thu, 03/13/2014 - 09:09 | 4542425 Pladizow
Pladizow's picture

WTF is a prime membership?

Thu, 03/13/2014 - 09:11 | 4542434 GetZeeGold
GetZeeGold's picture

 

 

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

Thu, 03/13/2014 - 09:13 | 4542445 negative rates
negative rates's picture

Somebody's got to have a beef on this, just not me.

Thu, 03/13/2014 - 10:13 | 4542662 imaginalis
imaginalis's picture

Just cancelled my auto-renewal. 

Thu, 03/13/2014 - 09:23 | 4542447 AlaricBalth
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

Thu, 03/13/2014 - 09:50 | 4542574 kaiserhoff
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.

Thu, 03/13/2014 - 09:53 | 4542588 Incubus
Incubus's picture

i'm a rich bitch?

 

news to me.

 

 

Thu, 03/13/2014 - 10:00 | 4542608 kaiserhoff
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;)"

Thu, 03/13/2014 - 11:31 | 4543080 Bioscale
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.

 

Thu, 03/13/2014 - 13:29 | 4543766 SeanJKerrigan
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.

Thu, 03/13/2014 - 13:34 | 4543801 Weisshaupt
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.  

 

 

 

 

Thu, 03/13/2014 - 17:55 | 4545214 RobertC
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!

Thu, 03/13/2014 - 09:54 | 4542589 Incubus
Incubus's picture

i'm a rich bitch?

 

news to me.

 

edit: TWO POSTS FOR THE PRICE OF ONE

Thu, 03/13/2014 - 10:42 | 4542810 Colonel Klink
Colonel Klink's picture

You must be a ZH Prime member!

Thu, 03/13/2014 - 10:05 | 4542620 Uncle Remus
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.

Thu, 03/13/2014 - 09:19 | 4542469 foodstampbarry
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.

Thu, 03/13/2014 - 10:08 | 4542637 Billy Sol Estes
Billy Sol Estes's picture

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

Thu, 03/13/2014 - 10:35 | 4542774 ElvisDog
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.

Thu, 03/13/2014 - 11:30 | 4543069 TheABaum
TheABaum's picture

Free money for Bezos.

Thu, 03/13/2014 - 10:18 | 4542687 post turtle saver
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

Thu, 03/13/2014 - 13:28 | 4543757 pasttense
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.

Thu, 03/13/2014 - 18:22 | 4545364 RobertC
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"

Thu, 03/13/2014 - 09:07 | 4542418 holmes
holmes's picture

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

Thu, 03/13/2014 - 09:12 | 4542439 drendebe10
drendebe10's picture

Ditto

Thu, 03/13/2014 - 09:20 | 4542473 Headbanger
Headbanger's picture

Ditto ditto..

Thu, 03/13/2014 - 09:55 | 4542595 ParkAveFlasher
ParkAveFlasher's picture

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

 

Thu, 03/13/2014 - 10:48 | 4542846 pods
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

Thu, 03/13/2014 - 13:22 | 4543721 ghostfaceinvestah
ghostfaceinvestah's picture

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

Thu, 03/13/2014 - 09:15 | 4542453 playnstocks
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

Thu, 03/13/2014 - 09:19 | 4542463 Cursive
Cursive's picture

@playnstocks

 

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

Thu, 03/13/2014 - 09:22 | 4542480 playnstocks
playnstocks's picture

I think he meant "The Weather"  LOL

Thu, 03/13/2014 - 09:27 | 4542492 dobermangang
dobermangang's picture

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

Thu, 03/13/2014 - 09:36 | 4542520 Toolshed
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.

Thu, 03/13/2014 - 09:47 | 4542557 scrappy
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.

Thu, 03/13/2014 - 10:27 | 4542681 HardAssets
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.

Thu, 03/13/2014 - 12:10 | 4543298 zhandax
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.

Thu, 03/13/2014 - 09:08 | 4542419 Bosch
Bosch's picture

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

Thu, 03/13/2014 - 09:27 | 4542497 centerline
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.

Thu, 03/13/2014 - 09:39 | 4542533 CH1
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.
Thu, 03/13/2014 - 10:56 | 4542879 Miffed Microbio...
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;-)

Thu, 03/13/2014 - 12:14 | 4543315 zhandax
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.

Thu, 03/13/2014 - 12:04 | 4543267 JP McManus
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.

Thu, 03/13/2014 - 13:24 | 4543313 malek
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?

Thu, 03/13/2014 - 09:43 | 4542552 Oldballplayer
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.

Thu, 03/13/2014 - 10:52 | 4542863 Miffed Microbio...
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;-)

Thu, 03/13/2014 - 12:37 | 4543474 centerline
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.

Thu, 03/13/2014 - 12:38 | 4543483 clooney_art
clooney_art's picture

You sound gay.

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

Thu, 03/13/2014 - 09:08 | 4542422 GMadScientist
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.

Thu, 03/13/2014 - 10:40 | 4542799 HardAssets
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. 

Thu, 03/13/2014 - 13:27 | 4543748 ghostfaceinvestah
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.

Thu, 03/13/2014 - 09:09 | 4542423 jovius
jovius's picture

It's because of the weather, I'm sure.

Thu, 03/13/2014 - 09:09 | 4542428 stormsailor
stormsailor's picture

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 February 24, 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

Thu, 03/13/2014 - 09:10 | 4542429 pods
pods's picture

Just got that email.  I still like Amazon for crowdsourced opinions (reviews) on items.  Much better than the crapshoot at HD or other box stores. At least on Amazon you can read about POS items.

pods

Thu, 03/13/2014 - 09:12 | 4542441 Bosch
Bosch's picture

This is true

Thu, 03/13/2014 - 09:12 | 4542442 SAT 800
SAT 800's picture

Yes; that too. I gave up on E-Bay the first of last year; Amazon does what's necessary to make you secure in your on-line shopping.

Thu, 03/13/2014 - 11:07 | 4542946 RacerX
RacerX's picture

I can't believe in 2014 ebay still looks like some flea-market. Well, I guess it is.. but the UI and functionality are just horrible. It wants to be all things to everyone. It is amazing to me that something as simple as "I want to post an item for sale" is still so difficult and convoluted.

And I personally cannot stand Paypal. Amazing nobody has come out with something to compete with those jokers.

Thu, 03/13/2014 - 09:21 | 4542478 RacerX
RacerX's picture

That's mostly true, but there are quite a few shill reviews, as well as some of my negative reviews have been pulled because they were deemed "offensive".

Thu, 03/13/2014 - 10:09 | 4542629 kaiserhoff
kaiserhoff's picture

Yes, especially true on books.  The more on point you are, the more the author or publisher will bitch.

Thu, 03/13/2014 - 09:23 | 4542483 GMadScientist
GMadScientist's picture

Amazon threads can also prove to be a surprisingly good comedy resource at times.

Thu, 03/13/2014 - 10:21 | 4542616 Confused
Confused's picture

I'm canceling my membership after getting the same email. I haven't used it as much lately, though, I must say for me the service was really quite good. Too bad. 

 

As for comedy. NOTHING beats this (the reviews are brilliant, and there are over 2,000): 

http://www.amazon.com/The-Mountain-Three-Short-Sleeve/dp/B007I4HIBA/ref=...

 

Thu, 03/13/2014 - 11:42 | 4543141 Froman
Froman's picture

I can attest that the "Mountain Three Wolf Moon Short Sleeve T-Shirt" sold by Amazon has indeed improved my life by leaps and bounds...the simple fact that Amazon through its Prime service can deliver a product of this quality in 2-3 days shipping time is well worth the 25% increase in the Amazon Prime subscription alone.

Thu, 03/13/2014 - 09:39 | 4542530 dobermangang
dobermangang's picture

I always check the reviews on Amazon.  Also check Youtube for reviews for anything you might want to purchase. 

Thu, 03/13/2014 - 09:54 | 4542590 ejmoosa
ejmoosa's picture

I wonder how much of the retail sales drop can be attributed to those opinions?  I know I have stopped myself from buying something that would have been a piece of crap, which I would have bought. a decade ago.

 

I appreciate the honest opinions about merchandise that just does not meet expectations BEFORE I buy it.

Thu, 03/13/2014 - 09:11 | 4542431 SAT 800
SAT 800's picture

Amazon "prime" was never sensible in the first place. I shop there; but when I read the blurb for "prime"; I just laughed. There was never any reason to pay them in the first place. Hopefully they have a business plan that can survive losing a lot of "primes"; because they make on-line shopping very easy and cheap; and you don't actually get ripped off on any transactions; their determination to insure that you have recourse in the form of returns or refunds is what's necessary for on-line commerce.

Thu, 03/13/2014 - 11:12 | 4542972 HardAssets
HardAssets's picture

It all depends on the services used as compared to the alternatives, of course. For me that means determining if I save anything in a year's worth of shipping charges by paying a hundred bucks up front. That's the only part of Prime that I use.

Thu, 03/13/2014 - 09:11 | 4542436 The Axe
The Axe's picture

Great question....no membership fees are worth it....but then Costco has done well, The real question is Amazon does not even disclose how MANY prime members they HAVE..so we will never know if it IS a positive or negative for the company!!!   winner winner chicken dinner

Thu, 03/13/2014 - 13:23 | 4543729 pasttense
pasttense's picture

They recently referred to tens of millions of Amazon Prime Subscribers. This means they must have at least 20 miillion.

Thu, 03/13/2014 - 09:13 | 4542443 Sudden Debt
Sudden Debt's picture

I wish Ebay had something like that!

I've made the postal services rich with all my silver coin purchases...

Thu, 03/13/2014 - 09:22 | 4542481 Agstacker
Agstacker's picture

LOL I've bought pre-1982 pennies as well from ebay, with the weight of those I think the mail lady isn't too pleased...

Thu, 03/13/2014 - 09:44 | 4542555 ghengis86
ghengis86's picture

If it fits, it ships! Shoulda seen the mail lady drop off some ammo. Gave her a lesson on the density of lead vs paper

Thu, 03/13/2014 - 09:13 | 4542444 SheepDog-One
SheepDog-One's picture

Costs more to put snow tires on delivery drones

Thu, 03/13/2014 - 10:33 | 4542759 DOT
DOT's picture

Damn the cost, Dog !

I would pay for that just for the visuals.

Thu, 03/13/2014 - 09:14 | 4542449 Seasmoke
Seasmoke's picture

Cancel"

Thu, 03/13/2014 - 09:14 | 4542450 Dr. Engali
Dr. Engali's picture

For now this is a great business model, and they don't have to make any money to do it.. Destroy the bricks and mortars, and then back an internet tax followed by  price hikes. It will work for a time, but eventually this tactic will sow the seeds of Amazon's downfall.

Thu, 03/13/2014 - 09:18 | 4542462 pods
pods's picture

Hate to say it Doc, but brick and mortars have been walmarted and shit is barely usable anymore.  Walmart made everyone skimp on motors, metal, etc and now everyone is doing that same thing.

That killed the independents who actually sold real shit.  Of course, Walmart had them name the products similar so you look and think Walmart's "identical" product is $30 bucks cheaper.

Shitty that Amazon supported the internet tax, but they probably saw the writing on the wall. The man was going to get his cut. Do it now, and you can drive out some competition while you still have market share.

pods

Thu, 03/13/2014 - 09:26 | 4542489 Dr. Engali
Dr. Engali's picture

Walmart has done more than it's share to destroy the small retailer, but they have cut their throats with their business model too. If it weren't for the welfare transfer payments they receive thanks to SNAP they would be in survival mode. Cut out Snap and they are screwed. Greed in any business model will eventually bring it down.

Thu, 03/13/2014 - 09:33 | 4542512 Spastica Rex
Spastica Rex's picture

That's not what Michael Douglas said.

Thu, 03/13/2014 - 09:41 | 4542541 Dr. Engali
Dr. Engali's picture

Give it time my friend. We see what greed has done to our country. 

Thu, 03/13/2014 - 09:47 | 4542567 Spastica Rex
Spastica Rex's picture

Maybe you're right. I think greed is defined as a "sin" in virtually every major philosophical/religious system. Well, not the Hedonists, but they've been gone for centuries. Well, maybe not.

I also think there was a B-list pulp sci-fi author back in the 50s who did a pretty bang up job of de-demonizing greed.

Thu, 03/13/2014 - 09:45 | 4542562 Oldballplayer
Oldballplayer's picture

How did it work out for him?  Throat cancer from licking nasty....

Thu, 03/13/2014 - 09:45 | 4542564 pods
pods's picture

I make a plan anytime I need something that I know walmart has. Park in the garden section, quick line to where the item is, get it, get out.

Wish I still smoked dope, could hit Walmart on a Saturday for some entertainment.  

pods

Thu, 03/13/2014 - 12:27 | 4543397 HardAssets
HardAssets's picture

pods:  "Hate to say it Doc, but brick and mortars have been walmarted and shit is barely usable anymore.  Walmart made everyone skimp on motors, metal, etc and now everyone is doing that same thing."

That's why, in a lot of product categories, many people try to buy the old stuff that was made well.  We have an old refrigerator in a back room that has been running every single day for decades without a problem. (Its been in at least three different locations through the years.) Spoke with an appliance repair guy whose been at it for 20 years and he said the new stuff doesn't even come close to that in real quality. (Though the new ones have fancy trim & you don't have to go through the trauma of actually opening the door to get ice from it.)

Same with many other items.

Thu, 03/13/2014 - 09:20 | 4542475 NotApplicable
NotApplicable's picture

They are going to become the clearing house for global taxation.

Thu, 03/13/2014 - 09:17 | 4542459 Defenestratus
Defenestratus's picture

Prime is so much more than netflix however.  The fact that you get free two day shipping on almost everything Amazon sells is the seller for me.  You buy one big screen TV or "large item" and it pays for itself just for the shipping costs you've saved.

 

Throw on top of that the value you get in the movies and TV shows and books... I've found more than $100 in value in it for the past 4 years or so.

Thu, 03/13/2014 - 09:19 | 4542466 pragmatic hobo
pragmatic hobo's picture

only problem is that amazon prices have been creeping up to such level they are no longer cheaper than other places ... paying $99 to lock up free shipping on non-competitive pricing seem dumb.

Thu, 03/13/2014 - 09:30 | 4542509 Toolshed
Toolshed's picture

"You buy one big screen TV or "large item" and it pays for itself just for the shipping costs you've saved."

You are quite wrong. I just cancelled my auto-renew for prime after years of membership. If you look at the price you are paying for that prime eligible item, and then find the same item without prime eligibility, you will notice the price is significantly lower for the non prime eligible items in most cases, so you are not saving as much as it initially appears. They are opening warehouses in my state soon, so there goes the sales tax benefit. There are many options to Amazon that are just as cheap, if not more so. The advantage to Amazon is they have such a huge variety of items to choose from. It's kinda like an online walmart. Oh well, now I will have to put a bit more effort into saving money, and Amazon will get a lot less of my business. Amazon will likely loose even more money as a result of this latest episode of them shooting themselves in the foot. On top of all that, their prime video streaming service sucks, so that isn't even a factor.

Thu, 03/13/2014 - 09:42 | 4542551 Defenestratus
Defenestratus's picture

Sure they're prices have been creeping up but in my experience they're still the cheapest, but I don't price-shop.  When I want something I go and get it.. then look for the lowest price.  Amazon STILL is the best price.  I just bought a Samsung SSD from them yesterday.... I chose 1-day shipping for $4 with prime.  Checking Google shopping, its the lowerst price available.  Newegg offered 1-day shipping for > $20 IIRC.

 

And I have to disagree on their streaming service.  Netflix never had anything i wanted to watch movie-wise, whereas with Prime I always find something I want to watch.  Additionally its not being throttleed by my provider like Netflix is.  I've never had a problem with it buffering.  I don't know why I even pay for Hulu anymore - its nothing that I can't catch on my DVR.

Google Play TV and Movies has taken over as my primary streaming service but Amazon is still solid.

 

Thu, 03/13/2014 - 12:28 | 4543412 Toolshed
Toolshed's picture

Here is the funny part. I emailed amazon's cust service, informing them I had cancelled the auto-renew feature on prime and that their price increase was stupid - they should have just restructured with several tiers of service levels. They must be getting tons of angy emails as a short time later I got a response apologizing and informing me they had cancelled my prime, which I had only 4 months left on, and gave me a full refund. I called cust service and explained the mix up, and found out that you can still get a full year of prime for $79 until March 20th. They offered to rebill me for a full year at $79, but I declined since I have a full week to decide if I want to continue for another full year at $79. Gee, I just can't understand why Amazon keeps losing money. What idiots.

Thu, 03/13/2014 - 09:17 | 4542460 Cannon Fodder
Cannon Fodder's picture

So memberships fees on Amazon go up by 25%. Check.

Due to fuel and transportation cost increases. Check.

Last night I had dinner with a friend at a Mongolian BBQ. $15 each out the door. Check.

I won't even think about taking a college course due to the cost. Check.

Health care is way too expensive. Check.

Recently looked at home and condo prices in my city. Can't even afford it. Check.

And they say there is no inflation out there?!

Thu, 03/13/2014 - 11:48 | 4543171 saltedGold
saltedGold's picture

You sound like one of those people with a job, always worried about money :)

Thu, 03/13/2014 - 09:19 | 4542465 Judge Crater
Judge Crater's picture

I am the reason why, I order too many items under $35.  Actually, Amazon's deal with the USPS shows that Amazon is trying to reduce the cost of shipping any way they can.  UPS costs more than the Post Office for parcel deliveries. The Subscribe and Save discount, where you are enticed to bundle together 5 or more covered items for a 15% discount on an initial monthly delivery (you set the delivery frequency for future deliveries) is another way Amazon reduces shipping costs.  Unlike NetFlix, Amazon has no real competition as a massive Internet mail order operation.  Ebay doesn't even come close.  Some Amazon Prime members will grumble but most will pay the new price.   

Thu, 03/13/2014 - 09:27 | 4542495 monopoly
monopoly's picture

We like Amazon for the few items we still buy. But we never got into prime. We always use free shipping when available. Takes 5 or 6 days longer, but so what. What the hell do I have to get from Amazon that I need in two days. Whole freaking planet going to blow up one of these days and I have to worry about 2 day shipping. I think not.

Thu, 03/13/2014 - 09:29 | 4542502 1stepcloser
1stepcloser's picture

Is this like SAM's club for trendies..

Thu, 03/13/2014 - 09:34 | 4542515 SpaceEcho
SpaceEcho's picture

This isn't a big hit for how often I buy from Amazon. My state's recent application of the 6.025% sales tax to Amazon purchases is what's pushing me over to Overstock.

Thu, 03/13/2014 - 09:35 | 4542517 1fortheroad
1fortheroad's picture

99 Yellen Bucks a year, thats 8 bucks a month plus you get movies and books, sounds cheap to me.

 

 

Thu, 03/13/2014 - 09:40 | 4542537 orangedrinkandchips
orangedrinkandchips's picture

yeah, my "student" cost is going up to 49 bucks??

 

Still, for taking a networking class and being classified as a student with discounts....sore dick....cant beat it.

 

I was very afraid of prime, even at 39 bucks for students, but it's pretty sweet. Movies, etc.

 

Amazon is tightening the noose folks!!!

Thu, 03/13/2014 - 09:41 | 4542544 glossolalia
glossolalia's picture

Still a good deal if you buy a lot of stuff on Amazon. The video streaming that comes included with prime also fills in some gaps that Netflix streaming has.

Thu, 03/13/2014 - 09:42 | 4542550 bhakta
bhakta's picture

I am a "Prime" member and even at $99 it is a good value for me as the FREE SHIPPING does more than compensate the cost. I wish every company would raise it's prices once in 9 years!

Thu, 03/13/2014 - 09:52 | 4542576 rockraider3
rockraider3's picture

Just to nitpick, the increase is really 33%, from the current price.

Also, they charge you sales tax on your prime membership, or at least they do for me. Including the sales tax implications, it's effectively a 39% increase for me.

We will probably keep it though because we utilize the movie steaming and their library seems comparable to Netflix at roughly the same annual cost. To me, the free shipping on purchases is just the frosting.

Thu, 03/13/2014 - 09:55 | 4542593 Father Lucifer
Father Lucifer's picture

Still a bargain just considering the savings of not having to drive around to look for stuff. Not to mention so much competition between affiliates the prices are way cheaper then the stores in LA Ca.

Thu, 03/13/2014 - 09:57 | 4542600 viator
viator's picture

At $79 or $99 Amazon Prime is a lost leader and a bargain. Sometimes the speed that Amazon delivers a package free to Prime members boggles the mind. Add the Prime video library and Kindle lending library and, as I said, it's a bargain.

Thu, 03/13/2014 - 10:00 | 4542606 Casserole of no...
Casserole of nonsense's picture

I use the absolute shit out of Prime. From what I am reading here I must be the reason they are raising prices. Dog treats. Hot chocolate, deodorant, lube, pepper spray, you name it, I just get it from Amazon in 2 days rather than driving to the store and dealing with idiots. Then again, I am probably the only person in America that hasn't set foot in a walmart this century...

Thu, 03/13/2014 - 10:14 | 4542672 Jim B
Jim B's picture

Me too..... @ $99 it is still a bargain....  They are probably losing money with me!

Thu, 03/13/2014 - 10:53 | 4542865 pods
pods's picture

Dog treats, deoderant, lube, and pepper spray?

That is going to be one hell of a party.

:)

Thu, 03/13/2014 - 13:47 | 4543882 redux2redux
redux2redux's picture

Reminded me of the line from Dr. Strangelove where Slim Pickens is reviewing the emergency kit...

Shoot! A fella could have a pretty good weekend in Vegas with all that stuff.

https://www.youtube.com/watch?v=F5qqfsQGYus

Thu, 03/13/2014 - 11:55 | 4543208 saltedGold
saltedGold's picture

90% of my shipping is through Amazon.  If you use the absolute shit out of Amazon, Prime is an insane deal.  If you order from Amazon a few times a year, Prime probably isn't a good idea.  I sit at home, take my time shopping for stuff, read the reviews, buy what I want and watch it appear at my door two days later.  My cars are damn near rotting into the ground from lack of use.  I can't imagine how much I've saved by not driving around to store after store looking for that one thing, only to buy it and realize it's a POS.  $20 bump in Prime doesn't bother me.  I ordered a Makita compound mitre saw and it shipped Prime.  I'd love to know how much 2 day shipping on something that big and heavy actually cost! 

Thu, 03/13/2014 - 10:03 | 4542618 bhakta
bhakta's picture

I had two Kindles damaged by my accidently sitting on them, Amazon replaced them so fast at no charge it was mind boggling. I am in Bangkok and they shipped to me from China and I received the day after I explained my problem. I for on am grateful for the good service.

Thu, 03/13/2014 - 10:08 | 4542640 luster
luster's picture

Everyone must be logging in the cancel their account.  I get the following message when I tried to look at my account.

 

Due to a technical problem, we are unable to display your complete membership information. Please try again later or contact customer support for help.

Thu, 03/13/2014 - 10:32 | 4542751 mademesmile
mademesmile's picture

I used to be a prime member - read the letter I sent Amazon to cancel.

 

I want an immediate refund of all amazon prime fees I've paid because of the misleading nature of the program.

The prices definitely are different ( and by different, I mean higher)  when I'm logged into Amazon prime. All you are doing is adding the cost of shipping to an item. When I'm are logged in, I pay more for products vs. if I'm not logged in. This is a major rip off! I'm talking about eligible items here. I happened to have another browser open and was shocked to see that because I was not signed in to my account, the item was $4.40 CHEAPER WITH SHIPPING than the same item by the same seller in my amazon prime account. So I'm paying $79 a year and get the privilege of PAYING MORE for the item because you are changing the base price.

Please email back immediately with a solution we can both live with.

 

They immediately canceled my membership and refunded the $79 fee - no questions asked.

If you have a membership, go to a separate browser that's not logged in and see the price differences yourself. Major scam in my opinion.

 

Thu, 03/13/2014 - 10:36 | 4542777 mydogisprettier...
mydogisprettierthanyou's picture

Glad i canceled it months ago. Im using only netflix and piracy now. See, the free market in action.

Thu, 03/13/2014 - 10:51 | 4542857 Notsobadwlad
Notsobadwlad's picture

They must have hired a Harvard MBA ... lol.

Thu, 03/13/2014 - 11:30 | 4543076 TheABaum
TheABaum's picture

At least the warehouse stores give free snacks.

Thu, 03/13/2014 - 11:57 | 4543225 nakki
nakki's picture

I don't think they will lose to many customers maybe 8% 1in 12 tops but they're still loosing money and most of the time if you take 5 extra minutes you can find it cheaper on another site. I rarely order things online because I already has enough crap. Last year I order an infrared heater from the same company that supplied it to Amazon went to their website and saved $30 bucks and got free shipping. Why would i pay $30 more when the company fulfilling my order had it cheaper? My point being Amazon is great for reviews and price checks but like I said can usually find it cheaper on other sites. 

Thu, 03/13/2014 - 12:37 | 4543469 Toolshed
Toolshed's picture

Losing 8% of your loyal customers is HUGE!!!

Thu, 03/13/2014 - 12:55 | 4543588 nakki
nakki's picture

I think that would be top end probably closer to 3% so they should net out, given 16 million or so prime members 260-300 million per year. Not such a big deal when you are talking about a company that has razor thin margins to begin with and in all likelyhood is still losing $$ when it comes to shipping. Now if their business revenues grow at only 10-12% a year or flatten out, because 80% of the population stops consuming as much as they have I think a fair price for their stock is $100, and that's with them earning $4 a share. Something they haven't been able to do.

Thu, 03/13/2014 - 12:48 | 4543545 BeerMe
BeerMe's picture

I still feel like I will save money but have started looking into other alternatives.  Between streaming and two day shipping it is a good value for me.  We will see how things continue to change.  Anymore I look at the competition and manufacturers websites before making a purchase which I used to never do.

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