Amazon Increases the Price of Prime to $139 Per Year
Amazon.com is raising the price of its annual Prime membership to $139 from $119, the company announced on Thursday as part of its fourth-quarter earnings results. Amazon last hiked the price of Prime in 2018, when it increased to $119 from $99. Four years before that, it raised the subscription fee to $99 from $79. Amazon’s annual increase amounts to about a 17 percent rise in price. Amazon also raised the monthly price of a Prime membership from $12.99 to $14.99, the company said. New members will see the increased prices on Feb. 18, and current members will be billed at the higher rate after March 25.
Total Retail's Take: This announcement from Amazon comes on the day that the retailer released its fourth-quarter earnings, which revealed that net sales grew 22 percent year-over-year and net income increased $33.4 billion. In order to sustain and grow that latter number, Amazon is betting the margin gains its realizes from the nearly 17 percent increase in Prime membership cost will offset any attrition that comes as a result of the price increase. Prime members are Amazon's most profitable and loyal customers, so the retailer has to balance increased margin with potential drop-off. But given consumers dependency on Prime, including its entertainment options and fast delivery, I'd be surprised if we saw anything more than minimal attrition as a result of this price increase.