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

Amazon Package

OK, it’s official: The price of Amazon 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.

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