Amazon's Raising Its Monthly Prime
If you're a monthly Amazon Prime subscriber, prepare to pay more. The Seattle-based shopping and technology giant is raising the monthly fee for Amazon Prime services from $10.99 to $12.99. The raise comes to an 18 percent increase, bringing the total annual cost of a monthly Prime subscription to $156, up from $132. The yearly lump sum for a Prime membership, however, will not go up from the current $99.
The Prime service has proven a revenue boon for Amazon. While the company's main source of income remains Amazon Web Services, and its retail services only bring in slim profit margins, the company released data last year showing how crucial the 80 million Prime subscribers have become to Amazon's bottom line.
Amazon Prime started in 2005, and by 2016, Prime sales growth was still running above 40 percent. The money Amazon brings in from Prime nearly covers its net shipping costs, and the increased price for membership might offset shipping entirely.
The price hike is something of an about face for the company, which was previously focused on targeting Walmart customers with Prime prices that were as cheap as possible. Originally, however, Prime's yearly price was just $79. In 2014, Amazon raised the price to its current, unchanged, $99. Like those customers who stuck with the service after the previous raise, Amazon is betting that its current monthly subscribers with either suffer the $20 raise, or switch to a yearly plan.
Source: Recode
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