As many of you may now be aware, the cost of Amazon Prime Membership has increased from $79 to $99 per year. Over the last nine years, Amazon has kept the price steady despite rising costs for their massive shipping operations. For anyone not aware, the Amazon Prime program is a yearly subscription to the worldwide company Amazon.com. It allows free 2 day shipping on all Amazon distributed products, one free ebook per month, thousands of free streaming TV shows and movies, as well as a few other perks.
Amazon's business structure was initially deemed not worthy of investment as it expected it to take four to five years to turn a profit, which it finally did in 2001. Since then, it's insisted on cutting prices as far as possible and amassing a huge audience mostly due to reputation. For a company that is known for throwing in more perks than they can afford to gain loyal customers, there is talk that the price increase for the Prime program will include more perks in the future such as streaming music. I would not be surprised if that were the case.
I'm not sure if there has ever been evidence that the Prime memberships have made or lost money for them since we're not sure of how many people are using the program enough to cover its cost. However, since reputation is more important in the online world than for a brick and mortar business, I doubt that Amazon would do anything to risk its reputation on the increase if it was not necessary. Therefore more perks are very likely. Also, it's been speculated that the increase could actually increase since people may increase the number of orders through Amazon to justify their membership cost for shipping. However, whether this will cover the cost for Amazon is another matter. It will be interesting to see how these changes will pan out in the near future.
Amazon's business structure was initially deemed not worthy of investment as it expected it to take four to five years to turn a profit, which it finally did in 2001. Since then, it's insisted on cutting prices as far as possible and amassing a huge audience mostly due to reputation. For a company that is known for throwing in more perks than they can afford to gain loyal customers, there is talk that the price increase for the Prime program will include more perks in the future such as streaming music. I would not be surprised if that were the case.
I'm not sure if there has ever been evidence that the Prime memberships have made or lost money for them since we're not sure of how many people are using the program enough to cover its cost. However, since reputation is more important in the online world than for a brick and mortar business, I doubt that Amazon would do anything to risk its reputation on the increase if it was not necessary. Therefore more perks are very likely. Also, it's been speculated that the increase could actually increase since people may increase the number of orders through Amazon to justify their membership cost for shipping. However, whether this will cover the cost for Amazon is another matter. It will be interesting to see how these changes will pan out in the near future.
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