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Price Rise: The Cost of Amazon Prime Up 25%

March 13, 2014
Personal Finance
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The cost of Amazon Prime just got a whole lot more expensive.

The company that pioneered shop-at-home convenience is “risking the wrath” of consumers by hiking the annual fee for its Prime service – which gives free, unlimited two-day delivery and other perks – by $20 to $99 this year.

As The New York Times notes: “A retailer raising a fee would not usually be news, but Amazon has built its considerable reputation on delivering value. This is the first time it has raised the fee for Amazon Prime in the nine years of the program’s existence.”

The 20 million Prime customers in the U.S. spend at least twice as much as non-users, according to some analyst estimates. The company is raising the price due to an increase in fuel costs and inflation.

While some worry the move will hit growth of the service, others say the reverse may happen.

“The mental math that people use is ‘I need to use up another $20 of free shipping,'” Mike Levin, a partner at Consumer Intelligence Research Partners (CIRP), a Chicago-based market research firm, told The Huffington Post.

Illustration by Brian Yee