Amazon Prime raises prices for customers, blames its higher wages, transportation costs
Amazon Prime has become one of the most convenient services with free two-day shipping on most orders for an annual subscription fee.
It just got a little more expensive. The company is increasing the annual price from $119 to $139 per year. Monthly fees have also increased from $12.99 to $14.99, the company announced Thursday.
Amazon Prime Vice President Jamil Ghani said in a statement that the price increase was due to “the continued expansion of Prime member benefits as well as rising wages and transportation costs.” .
The price increase will take effect on February 18 for new members. For current members, prices will increase on their renewal date after March 25.
Neil Saunders, chief executive of research firm GlobalData, said he was not surprised by the price hike, noting that Amazon’s last two increases in 2018 and 2014 were also $20.
“Amazon faces much higher costs and is still investing heavily in Prime, so there’s a real case for raising fees,” Saunders told USA Today. “While nobody likes paying more, Prime is still a very attractive, value-for-money program that most members use extensively.”
This increase follows several price hikes by other streaming services. Netflix increased its rates in January and Hulu increased its monthly rate last year.
Mr Saunders believes the changes will not lead to significant numbers of cancellations by Amazon Prime members.
“Amazon will have done the math on this and their view will be that they have more to gain than lose from this decision,” he said.