Bad News for Amazon Prime Customers
Enjoy that $79 Amazon Prime while you can.
The price of Prime, the $79 yearly subscription that includes free two-day shipping, may increase between $20 and $40 in the U.S., the company said late Thursday in a call with investors and analysts.
The price of Prime hasn’t changed in the nine years since it first launched. The company said the increases were the result of rising fuel and shipping costs over the past near-decade.
Tom Szkutak, Amazon’s CFO, said that Amazon was “considering” a price increase, but didn’t give a timeline as to when it would go in effect. He also declined to answer an analyst’s question about how the price increase would be implemented, so it’s unclear if existing Prime members would be grandfathered in at $79.
Amazon Prime initially gave customers free two-day shipping on over 1 million items. It has since grown to include 19 million items, Szkutak said, as well as access to Amazon Prime Instant Video and a digital library for Kindle owners. Szkutak said that the potential price increase wasn’t to cover costs associated with Amazon’s subscription video service or the Kindle Owners’ Lending Library, though he acknowledged that “those are certainly costly.”
The service automatically re-enrolls people after a year.
Amazon has refused to disclose exactly how many Prime members exist, but in December said that it was “tens of millions.”
A Morningstar report from last year said that Prime members spend “approximately twice as much” as their non-Prime counterparts each year, shop more frequently and buy pricier items.