If you rely on Amazon Prime to get necessities delivered to your door (or just for a hit of serotonin), we’ve got some bad news: Soon you’ll be paying more for the convenience. Amazon is raising the price to $139 from $119, the company announced in its fourth-quarter earnings statement.
Amazon last raised Prime’s cost in 2018, also by $20. Prime started as a $99/year service that got you free two-day shipping and has since evolved to include other Amazon perks like access to Prime Video content.
In a statement, Amazon said:
With the continued expansion of Prime member benefits as well as the rise in wages and transportation costs, Amazon will increase the price of a Prime membership in the U.S., with the monthly fee going from $12.99 to $14.99, and the annual membership from $119 to $139.
The prices will go into effect on Feb. 18 for new Prime members. Current subscribers have until March 25 before seeing the rate hike.
Analysts had expected Amazon to announce it was raising prices during its earnings call this week, because the company has increased wages and is offering larger signing bonuses to attract workers. The global supply chain shortage and general disruption of labor across the board also contributed to this subscription increase, and Amazon has had to spend more on shipping when it can’t get products into the right warehouses.
“It’s about time,” Michael Pachter of Wedbush Securities told Reuters, regarding whether Amazon would increase Prime’s fee. “Shipping costs have gone up, period.”
Sure, shipping costs have increased. And maybe the subscription increase has nothing to do with the fact that the size of Jeff Bezos’ boat has required the temporary dismantling of a historic bridge. The timing sure is strange, though.
Amazon Prime remains the company’s biggest cash cow. According to CNBC, Prime members tend to spend more on Amazon than non-Prime customers. And why wouldn’t they? If you’re paying for that free shipping, you’re going to check with that source first before going anywhere else to get your money’s worth.
An Amazon Prime account now gets you a long list of things. You can choose from a little more than a half-dozen shipping options, including one-day and same-day delivery on some items. Amazon gives you access to its massive content library through Prime Video and Music Prime, as well as ebooks through Prime Reading. You can even share your Prime benefits with another person in your household.
But there’s no denying that a $40 price increase over the last four years is pretty substantial. If you don’t want to pay for faster shipping and don’t use the rest of Amazon’s perks, you’re probably not alone. There have been few new Prime benefits added recently. Last year, the company introduced a prescription savings benefit, which offers subsidized medication and free two-day shipping on refills.
With the shipping delays affecting every online merchant’s core business, taking a break from shopping might be a good idea—at least until the supply chain ramps up again. Then we’ll see if Amazon Prime is actually worth that annual fee.