Online retail giant Amazon revealed last week that the monthly subscription to Prime membership had been increased by close to 20% thereby raising the fee to $12.99 from %10.99. For students the monthly increase is 18% as the Prime membership fee was raised to $6.49 from $5.49. Fees for the annual subscriptions of Amazon Prime will however remain at $49 for students and $99 for non-students.
Some of the perks that members of Amazon Prime enjoy include free online streaming of television shows and movies on Prime Video, unlimited music streaming on Prime Music, cloud storage for photographs and free two-day shipping on over 100 million items.
Value for money
But even though the annual fee for Amazon Prime has not been increased it is understood that the online retail giant is on the verge of doing so. Analysts estimate that annual fee will be raised by roughly 20%. Per analysts, Amazon Prime is still great value for money even at a higher fee. This is because most of the items stocked by Amazon as sold at a cheaper price compared to traditional retailers.
Amazon also offers the added value by delivering at the doorstep of the customer. This means more convenience as consumers make fewer trips to the store as well as not having to queue. Added services such as cloud storage, music and video also make the service even more worthwhile.
The price hike by Amazon is expected to significantly boost the sales and profits of the e-commerce giant and this is likely to have a positive impact on the share price. Additionally more profits means an enhanced capacity for reinvesting in the business with new verticals new content and logistics via acquisitions for instance.
The annual fee for Amazon Prime is not the same around the world though. In the United Kingdom the fee is $10.50 while in Austria and Germany it is $85. Canada’s fees are $63 while in Belgium, Holland and France it is $60. In Japan it is $35 while in Mexico, Spain and Italy it is $25.
The upping of Amazon Prime fees comes in the wake of the e-commerce giant opening its cashier-free Amazon Go pilot store to members of the public in Seattle. Since December 2016 the store had been in a testing phase during which only employees of the retailer had access. Items that shoppers pick from the shelves are identified by ceiling-mounted cameras. Payment is by credit card and the billing happens automatically when shoppers exit the store.