Amazon pantry

On Thursday, Amazon confirmed the speculation, and announced that they would be increasing the cost of Amazon Prime by $20 to $99/year. While some had speculated as much as a $40 increase, 20 bucks is all it amounted to. Further, the Amazon Student membership also increased to a total price of $49/year:

For the first time since it was introduced nine years ago, the price of Prime is going up. Existing Prime members will pay $99 per year on their annual renewal date and Amazon Student members will pay $49.1

There are a lot of factors that go into such a decision. According to a CNN Money article on the proposed price hike, the main factor was shipping costs:

On the company’s earnings call Thursday [Jan 30, 2014],Szkutak [Amazon CFO TomSzkutak] said the company has not finalized its decision. He cited increased fuel costs for the need to raise prices. But some bank analysts note that crude oil prices have remained fairly steady since 2011, so the real pressure might be coming from Amazon’s huge hiring spree. The company has quadrupled in size to 108,000 in only four years.2

Amazon Prime, even at $99/year, is an incredible value. In addition to free 2 day shipping and deeply discounted overnight shipping, Amazon Prime customers get access to their e-book lending library, free streaming videos and other deals. As shipping costs continue to rise, Amazon Prim could pay for itself in one or two orders.

  1. Amazon Help and Customer Service  
  2. Jose Pagliery, CNN Money, “Amazon considers $40 Prime price hike,” 3 February 2014