Amazon raises the price of Prime to $99/year, citing increased fuel and transportation costs

20 Comments

Credit: Flickr / William Christiansen

OK, it’s official: The price of Amazon (s AMZN) Prime, which offers unlimited two-day shipping and other perks for $79, is increasing to $99 per year. Amazon’s stock was up over 2 percent on Thursday morning.

If you’re an Amazon Prime member now and your membership was set to renew before April 17, 2014, you’ll still pay $79 for that renewal. Prime memberships renewing after April 17 will be $99. And new Prime members will pay $99 per year starting March 20. (So if you’ve been thinking about signing up for Prime, do it now and save $20.)

In addition to unlimited two-day shipping, Prime offers instant video and lets Kindle owners borrow one ebook every month (from a library of largely self-published titles). Amazon is also reportedly working on a streaming music service for Prime members.

Amazon had told investors in January that it was considering raising the price of Prime between $20 and $40 a year due to “the increased cost of fuel and transportation as well as the increased usage among Prime members.” The company recently raised the price of Prime in the U.K. and Germany after folding in streaming video from Lovefilm, and last year it increased the threshold for free “Super Saver” shipping from $25 to $35.

In a statement, Amazon told me, “We are working to expand selection even further, as we develop additional fulfillment and transportation capacity to make the Prime program even more valuable to our members. Even as fuel and transportation costs have increased, the price of Prime has remained the same. If you consider things like inflation and fuel costs, a Prime membership valued at $79 in 2005 would be worth more than $100 today.” Well, $99 is close enough.

P.S. I live in New York City, and this morning, I was also seeing another option: Prime Fresh, offering “FREE same-day or next-day early morning delivery on orders over $35 on over 500,000 items” for $299/year Prime Fresh is already available to customers in Seattle, San Francisco and Los Angeles, and in those cities it includes grocery delivery. I assumed it was expanding to New York City, but it’s not: It looks as if I was getting this upgrade option because I recently shipped something to my sister-in-law in Los Angeles. (If you live in NYC, it’s worth noting that the Amazon-owned Quidsi companies like Diapers.com and Soap.com already offer same-day or next-morning delivery on many orders, with free shipping on orders over $49.)

h/t @sarahw

This post was updated several times on Thursday morning.

20 Comments

TinaB

What if you started a trial membership before the 20th and are set to pay after the 20th? (like say this later week)

Andrea Glass

I keep reading about people stating that Prime items are always more expensive or that Prime items cost more when logged into one’s account as opposed to viewing the same product while logged out, but this has not been my experience. I always price compare to check for the lowest price, inlcuding shipping and tax, and I’d say 99% of the time, the item costs less through Amazon Prime.

I won’t cancel my Prime because I think it’s still a good value at $99/year, especially since I do most shopping online and buy tons from Amazon. I also utilize their video streaming and Kindle lending library often. Other plusses are how quickly they get shipments out the door and their customer service. I haven’t had many issues in all the years I’ve been ordering, but when I have, they’ve always responded and resolved my issues quickly. I don’t recall ever receiving a Prime shipment late, but there have been many times I’ve received delivery a day early.

TinaB

Personally I have to agree with Andrea… but not for the exact same reasons… I personally am a Mom to 4 & 3 fur babies… I do swagbucks, inbox dollars, mypoints and bing and I opt for the free amazon gift cards (I think I MAY have spent about $50 of actual cash in the last year on Amazon) so for me… at $99 it’s a decent deal (granted not AS good as $79 though) since *most* places charging shipping on Amazon run anywhere from a couple bucks upwards of $30 depending on time frame and weight etc… and since I tend to order as I earn my GCs and all in all I would probably end up spending double (if not more) on shipping without it being 2-day shipping throughout the year… So I will be keeping my trial even though I am NOT a fan of having to pay a lump sum of $99 in one shot… they really should offer the ability to pay for it in either monthly or every 3 month increments… I think they would have a LOT more prime members if they did that (God only knows it would make it easier for those on a budget!)

Howard

why isn’t it possible to renew current memberships now to lock in the $79 price for an additional year?

nubwaxer

so if you buy 10 items it will cost about $10/item in free shipping because you’re a prime customer. 20 items=$5/item prime added cost. hardly a good deal in my opinion.

Maxwell

I think the price is appropriate. You just have to consider if the value is worth it for YOU! For me, I ship with Prime all the time, buying things I could often just go to the store for- but since it’s cheaper on Amazon, and will arrive in two days- I do that.

Additionally, we watch Prime videos through Roku (including a few of the new originals they have going), and I have in the past borrowed lending library books. so in our house, $100 is a steal.

Ric

Hard to fault the reactions here, but truth is the dollar is losing value all the time and logistical costs are rising at the same time. So I cant be upset with them too much. I also think it may be a preemptive decision to get ahead of any potential minimum wage hikes.

andybeach

I’m perfectly fine with the price increase. I take advantage of the free shipping at least once a month, we watch prime videos on 2 ipads and a TV in my house, and i use the kindle for the loaner book or the kindle first at least once every other month. $20 extra a year? no problem. I’m willing to bet they continue to increase services through the coming year as well (keep in mind when i joined i only had the shipping feature, everything else is stuff they’ve added for FREE).

Eric Han

I think so, I’ll cancel prime membership, I don’t want pay $110.. Crazy amazon.

Bill Miller

I was on the fence about continuing w/ Amazon Prime, but now that decision has been made for me. Just turned off my automatic renewal. Goodbye Amazon Prime.

Marc Negron

I wanted to stop auto renew after I got their email but the manage prime membership page was blank for some reason. I sent an email to customer service (they sure do not make it easy to contact them directly) and they took care of it for me.

I fully understand their need to support their shareholders and make a larger profit so I’m not mad at them. However, it was no longer worth it for me as the free movie weren’t one I really wanted to watch and the 2-day shipping most times were taking a week now. Also if anyone bothers to compare the items that are Prime eligible, they are always more expensive than elsewhere (including shipping sometimes).

I did enjoy it while it lasted but as another user commented, it will now force me to order less and save a bit of my money.

Linda Monday

Not only are they raising the price they also charge taxes on the membership fee. You will actually be paying a lot more then $99. My membership last year was $78 plus taxes which brought the full price to $85.32. If I choose to continue my actual fee will be over $110. No more Prime for me.

ana

I am sorry, I taught $79 was bad enough but I bit the bullet but I cannot do the same for
$100. My prime membership will end and this will also help me to spend a lot less with Amazon.

don

Although I have Prime, an item I just ordered on this past weekend (Prime) won’t arrive until today. FOUR days, not two – not PRIME! When the renewal notification comes, I’ll probably reject it.

josh

I assume you mean New York CITY… all of western NY is pretty much cow country so

David Sexton

Just revived my email. Just sent Amazon my two reposes. First, was a email telling them good-bye to Prime. Second, was heading to my account, and turning auto renewal off.

Pine Tree

Agreed. My account expires on April 20 so my renewal price is $99 and I’ve turned off the renewal option. I feel as if Amazon Prime instant video is the reason for the price increase due to higher royalty payments instead of shipping fuel cost. I already have nexflix so why would I pay for another video service.

sumbudee

BTW, you can currently get Amazon Prime *free* for one year when you sign up for one of the two Blue Cash cards from American Express. It’s a special offer they have right now.

There’s the Blue Cash Everyday Card (BCE) and the Blue Cash Preferred Card (BCP). BCP has $75 annual fee; BCE doesn’t. However, BCP has $100 initial spending bonus (after spending $1K in first 3 months), 6% cash back at grocery stores, and 3% cash back at gas stations, while BCE has just a $50 initial spending bonus, 3% cash back at grocery stores, and 2% cash back at gas stations. There are probably some other differences as well.

The math is a bit complicated, so you can use the rewards calculator at CreditCardTuneUp. com to compare the two Blue Cash cards for your particular expenses.

Jacob Flatter

Fresh.amazon.com lets you select a delivery address, and Amazon will notify you when you are within their fresh delivery geography.

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