Amazon is raising the price of prime and raising the annual membership fee from $119 / year to $139 / year.
The company announced the news as part of its fourth quarter earnings report.
The monthly fee for U.S. members will rise from $12.99 to $14.99. The price change will take effect on February 18., For current prime members, the price will apply after March 25, which is the date of their next renewal. Video subscriptions only ($8.99 / month) will not change.
The price increase will help offset some of Amazon’s increased costs in the past few quarters due to labor supply shortages, rising wages, supply chain problems and additional transportation costs.
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Andy Jassy, chief executive of Amazon, said in the company’s financial report: “as expected during the holiday, labor supply shortage and inflationary pressure have led to rising costs, and these problems continued to the first quarter due to Omicron.”.
Amazon last added prime members in 2018, when it raised the price from $99 / year to $119. In 2014, it also raised the price from $79 to $99.
The membership program is an important part of Amazon’s business. One of the main benefits is free shipping, as well as other benefits such as streaming video and music; cloud storage; Discount of whole food restaurant; There’s more.
Brian olsavsky, Amazon’s chief financial officer, told reporters on a conference call that it is difficult to measure how the latest growth will affect the growth of prime members with past growth, because there are differences in benefits and the number of subscribers at each point.
“When we intend to raise prices, we take them very seriously. We are always balancing the value to our customers and the cost of providing benefits,” olsavsky said. “We always have great confidence in our high-quality products, but we don’t always have great potential value in the past.”
According to business insider, mark Mahaney, a longtime analyst at Amazon, said the company would increase its operating revenue by about $2 billion through a $20 price increase.
Amazon has invested a lot of money in its logistics network, making one-day distribution the standard of free and high-quality distribution. Since 2018, the availability of daily shipping has expanded from 48 subway stations to more than 90 subway stations, while the availability of high-quality free shipping projects has more than doubled.
In the fourth quarter, Amazon spent $23.6 billion on shipping, up 10% year-on-year.
As of April 2021, there are more than 200 million prime ministers in the world.
Other companies, including Netflix and Hulu, recently announced higher member prices.
Amazon competitor Wal Mart offers its own membership program, Wal Mart +, which is $12.95 per month and $98 per year.