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Summary:

Amazon shared a few facts about Amazon Prime, which offers unlimited two-day shipping and other perks for $79 a year. The company won’t state how many members Prime has, but says it ships more items with Prime than with its basic free shipping option.

Amazon Package
photo: Flickr / William Christiansen

Amazon released a few statistics about Amazon Prime, which offers members free two-day shipping and other perks for $79 a year. Well, “statistics” is the wrong word — they’re more like factoids. Just as Amazon won’t tell you how many Kindles it’s sold, the company also won’t share how many Prime members it has.

Monday morning’s release comes ahead of next week’s Amazon press event, where it is widely believed that Amazon will announce a new Kindle Fire and Kindle e-reader. The Kindle Fire comes with a free one-month trial of Amazon Prime.

The main announcement Monday is that the company “now ships more items with Prime Free Two-Day Shipping than with Free Super Saver Shipping — the program Amazon launched in 2002 that offers free shipping on orders over $25.” That isn’t particularly surprising because households with Prime tend to order a lot more stuff. Macquarie analyst Ben Schachter did a self-analysis last year and found his household placed seven times more Amazon orders after switching to Prime.

Most people with Prime would probably report a similar experience. After I switched to Amazon Prime, I started ordering nearly all of our household items from the service. The last five items I ordered were a dress, tights, a baby gift, an iPad case and Swiffer Dusters.

Analysts have tried to guess how many members Prime has. In February, Bloomberg released a super-sketchy report citing “people familiar with the matter” who say it has between three and five million members. Last November, Piper Jaffray analyst Gene Munster estimated Prime would have 10 million members by the end of 2011. Again, Amazon hasn’t released any official data.

Here are some other tidbits from the release:

  • Top four items ordered with Prime: 1) Kindle Fire; 2) $79 (basic, non-touchscreen, ad-supported) Kindle; 3) Kindle Touch (they don’t specify if it’s the ad-supported model or not); 4) Fifty Shades of Grey.
  • “Amazon Prime now features more than 15 million unique items.”
  • The Prime Instant Video catalog, which offers free streaming to members, contains 22,000 movies and TV episodes. The most-watched TV show is “Downton Abbey, Season 1″ and the most-watched movie is the Swedish version of “The Girl with the Dragon Tattoo.”
  • The Kindle Owners’ Lending Library, which lets Prime members borrow one ebook for free each month, now offers more than 180,000 books. Amazon cites bestsellers like “The Hunger Games” and Harry Potter, but the vast majority of titles in the KOLL are self-published.
  • Totally my favorite: “Amazon Prime members could order 500 different items with Prime Free Two-Day Shipping every day of their lives and still not order every Prime item.” In other words, you could order 500 items every day for 82 years.
  • Amazon Prime’s annual price, $79, hasn’t changed since it was launched seven years ago. I suspect many Prime members wouldn’t be bothered by a price hike — to, say, $99 — but the press release does not make it sound as if Amazon is considering that.

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  1. I like this whole PRIME idea. I was considering a Google Nexus 7 but I’m going to order a KF2 as soon as I can. Just hope the KF2 gets Jelly Bean down the road. You know damn well that Google is not going to let Amazon have JB at launch of the KF2.

    1. Jelly Bean is already open-sourced by Google a long time ago. Anybody, including Amazon, can take it and use it as is, or modify it according to their needs. Google is not stopping anybody from doing so.

  2. Prime highlights the effectiveness of new commerce strategies that build on relationships and exploit the Internet to take that to new levels.

    I have been blogging about an approach that takes this much farther, that I call FairPay, at FairPayZone.com.

    The idea is to view sales not as single transactions, but in a relationship, and to provide for automated dialogs with customers about the value they perceive and are willing to pay for. FairPay takes elements of pay what you want, lets users set prices after they know the value, and lets those who set fair prices continue in a FairPay relationship with the seller. This has much of the customer appeal and acquisition value of free trials and freemium, since users are not at risk, and pay only what seems fair, but it motivates users to pay fairly to continue on that basis.

    FairPay is especially suited to digital content and services. Users have widely varying price sensitivities — value propositions, perceptions, usage levels, usage styles, and abilities to pay. They know that digital services can be duplicated cheaply, and are willing to pay only what a product seems worth to them. What we really need is a way to do “value pricing” that accommodates such variations on mass-scale. FairPay brings “value pricing” to a mass market.

    The task of deciding how much to charge for what features and usage levels is outsourced to the user, and is customized to them, but the seller can motivate the user to be reasonably fair. This may seem utopian, but there are many ways to apply “choice architectures” to “nudge” users to be fair (and to cut off those who are not). Amazon could do that very well.

  3. I hope Amazon keeps the cost of Prime constant for decades like Costco keeps the cost of their hot dog and soda combo constant ($1.50 for many, many years now).

  4. I would be bothered by a price hike. I would have canceled my Prime membership this year, if Amazon hadn’t added more content to the Prime video service. $79 is at the top of my budget for something like Prime so it has to be really compelling. $49 would be more appropriate for only 2-day shipping. It could be made better by allowing all members of the household to utilize the extra Prime benefits. Prime video can only be watched on the primary account. Kindle books can only be borrowed on a Kindle device belonging to the primary account. If the price were to be raised to $99, all the services would need to be available to all the accounts in the household.

  5. Amazon prime members had the ability ti borrow 1 free book per month and to read an unlimited number of the books offered by new kindle publishers free to prime members in the 1st 15-60 days of publication. There used to be a link in the kindle fire for free kindle books. Now it is gone and there is no mention of it anywhere. Do kindle authors still have the ability to offer their new kindle books for free when they publish them or has this program been cancelled?

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