Amazon Prime Price May Increase, Proving That Nothing Is Ever As Free As You'd Like
By Steve West 2014-02-03 12:18:35
Amazon Prime is, in my opinion, the only way to shop right now. I’ll get down on some local trinket shops to find that one-of-a-kind doohickey for the wife’s birthday, but as a rule I go Prime. And I go hard for the service. In addition to “free” two-day shipping, the service includes a Kindle library and streaming videos with no additional cost. After nearly a decade the cost of Prime may be going up, and the news is causing a bit of controversy. Will old time Prime members be grandfathered into the old pricing scheme? Audible, now an Amazon company, allowed me to keep my old cheap monthly fee whenever they upped prices.
The concern Amazon has with not raising current member’s prices is that an increase will cause trepidation amongst potential new users. Rumors have the price, currently at $79 per year, raising $20 or $40. Those of us who’ve benefited from Prime over all these years wouldn’t have a vitriolic reaction to a bump in cost. No one wants to pay more, but when you factor in the reality that over the years shipping and gas costs have skyrocketed and Prime membership has remained stable, it’s not hard to see that Amazon needs to do something.
The company spends more than twice as much on shipping costs than it charges as it is, and while the volume of sales has justified their costs it may have reached the bursting stage. Prime members spend around twice as much as non-members, but that volume increase is now showing an inability to support the program as it stands. It reminds me of those small town eateries that somehow survive on serving huge portions of chicken parm for only $8.99. They’re not making a profit, but the amount of cash flowing through the restaurant keeps the staff paid, the vendors happy, and the lights on. Everyone breaks even, and that model is not good for an international company like Amazon.