Amazon may hike the price of 'Prime' by up to $40

The e-commerce giant says it's considering a more than 50 percent increase for the popular service, which offers members free 2-day shipping and streaming video.

By MSN Money Partner Jan 31, 2014 3:59PM

An employee tapes up a box for shipment at the Amazon.com distribution center in Phoenix, Ariz. © David Paul Morris/Bloomberg via Getty ImagesThe Wall Street Journal on MSN MoneyBy Greg Bensinger, The Wall Street Journal


Amazon.com (AMZN) said it is considering a more than 50 percent increase in the U.S. to its popular "Prime" two-day delivery membership program to help cover increased shipping and fuel costs.


The change – of between $20 and $40 annually – would be the first in the nine-year history of the Prime program. Amazon has brought in millions of higher-spending customers through the program, which promises unlimited shipping on many items, as well as video streaming for U.S. customers.


Chief Financial Officer Tom Szkutak announced the possible change on the company’s earnings conference call, prompting a question from nearly every analyst covering Amazon.


"With the increased cost of fuel and transportation as well as the increased usage among Prime members we are considering increasing the price of Prime," Szkutak said. He revealed little else about the program, other than to reiterate its import.


The Prime program is considered to be one of Amazon's chief competitive advantages because it encourages members to keep spending with Amazon, rather than with competitive retailers. Indeed, market research firm Consumer Intelligence Research Partners last year estimated Prime members may spend more than twice as much — $1,340 per year – than non-Prime members using Amazon.


As well, Amazon offers exclusive streaming video content as part of the U.S. Prime membership and the company has been beefing up its library to compete with Netflix (NFLX) and draw new users.


But Amazon risks alienating some potential customers because even at the low end of its proposed Prime price bump it would cost more per month than a Netflix account: $8.25 versus $7.99.


More from The Wall Street Journal


47Comments
Feb 1, 2014 11:03AM
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If you only use Amazon Prime to watch the instant videos, you are clearly not using the membership for the right reasons. The savings you get for shipping costs alone, justify the membership. The videos are just a bonus. Comparing Amazon Prime to Netflix or hulu is like comparing apples & oranges. Do they offer shopping?
Feb 1, 2014 12:57AM
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Sales are down so they are going to hike prices.


That always works.


*cough*

Jan 31, 2014 5:57PM
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That is when they can kiss my @ss goodbye .....I have Hulu @ $8 and Netflix @ $8 so I won't keep AP.....
Feb 1, 2014 8:08AM
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I would no longer continue my account.
Feb 1, 2014 10:37AM
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Bye Bye Amazon Prime! I refuse to pay more.

Feb 1, 2014 12:09PM
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If Amazon increases Prime, I will be cancelling my membership.  The $79 per year is well worth it for me because I do stream movies and I do a considerable amount of shopping on Amazon because of the 2-day no freight charges.  To increase the cost by $40 is a big mistake.  The rich get richer and the poor get.......

Feb 1, 2014 3:59PM
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I've admired Jeff Bezos and Amazon's performance, but a big price hike of Prime will lose this customer!
Feb 1, 2014 11:30AM
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I hope they don't hike it too high, I have had it for a few years now and I could understand a minor bump but not 50%...I would have to go back to shopping another way, but these days we always seem to be moving on as companies make poor customer service decisions that damage retention. I have been very happy with Amazon and hope I'll be able to continue...we'll see what they do.
Feb 1, 2014 5:12AM
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I'd probably pay another $20 but really anything higher I'd probably axe this account all together! 
Feb 1, 2014 10:01AM
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I wish they would offer a prime streaming option 5.99-7.99 a month, I don't purchase enough stuff in a year to justify the 79.99 a year and I only signed up because of a large Christmas purchase and the fact I got rid of cable tv.
Feb 1, 2014 4:42PM
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I have used the shipping part of my membership so much I have lost count of how much I would have had to pay otherwise.  Another aspect of Amazon is that you can do unlimited research on products before you decide to buy or not.  They were the mediator between the vendor and me.  They are the ones who notified me as to how to handle it to stay safe and also come away happy with the whole purchase.  I have yet to use the videos portion, but I still believe that I have been the winner in shipping alone.  One price hike in 9 years is unheard of.  Especially the way the economy has been during that time period.

I have actually bought 2 items out of many purchases from other sites, but if  you are able to take the time to do the research, you will most likely be happy with the majority of your purchases. The vendors have all been better than I could have imagined and their products have been very good as well.  The shipping has always been when they say it will ship.  All in all, if you think about it, they could have raised it much more.
Feb 1, 2014 9:58AM
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This is absolute ****!!!! They're getting a Vulgar e-mail... why? even if it's just one? Because at least they hear the very words from the CUSTOMER! Will it make a difference? maybe not, but at least the words are said. Otherwise, it's Bye to what had once been a decent ride.
Jan 31, 2014 4:55PM
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Just watch the sales go on a diet . . . melt away . . ..
Feb 1, 2014 1:18PM
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I paid $89 for mine this year instead of the $79 I've paid every other year...so they already did increase.  If they jump again I will probably dump it.  I don't use the streaming videos portion, I haven't figured out how to give my granddaughter access to the books without access to my whole account so that isn't used either.  Prime is why I shop with Amazonj.  The pricing isn't that much cheaper on most of the items I purchase.


Jan 31, 2014 4:17PM
Feb 1, 2014 1:27PM
Jan 31, 2014 10:21PM
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Amazon is no different than the next company....they are GREEDY just like the next. It's always about the profits and money never the customer.
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The Amazon Prime fee is easily made up by the free shipping...let alone the streaming offered..I'll continue to use Amazon Prime!
Jan 31, 2014 11:27PM
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Wait, I thought it already was $40...I'm confused.
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