Is Amazon Prime Still in its "Prime"?

Published: February 14, 2022

‍

‍

Which services have been around for more than ten years, have generated a considerable amount of money, and have country-specific initiatives that are all part of a single company? Most people would guess a bank, airline, or hotel chain's reward program. However, the answer is not related to any of those industries. It's online shopping, more specifically, Amazon Prime.

If you live in the United States, standard shipping takes about 4-5 business days; therefore, Jeff Bezos founded Amazon Prime to increase customer usage with products delivered in one, two, or the same day. Since its launch in 2007, the $79 annual fee has been widely regarded as one of Amazon's finest innovations.

It took Amazon six years to raise the fee to $99 per year. In 2018, Amazon announced a price increase for Prime from $99 to $119. Subscribing to other services such as Walmart Plus is less expensive. Still, Amazon Prime offers a much wider selection of products and offers same-day delivery on many of them.

During all these years, Amazon Prime has grown to such a size that critics, international authorities, and politicians are all asking whether the giant has become an unstoppable force or is there anything that can be done to limit its reach.

From its deep commitment to low prices and never-ending drive to make modern living more convenient with Prime services, Amazon is by far one of the most trusted brands. Now the question is, what will happen now that Amazon, the retailing giant, is raising the price of its Prime delivery and media subscription from $119 to $139 per year?

‍

Why is Amazon Increasing Prime Subscription Charges?

This is the second time that the price of a Prime membership has increased since 2018. The new price increase is necessary to help counteract rising labor and logistics costs as Amazon resumes developing its offerings in the entertainment space. It also extends delivery options for more than 200 million Prime members worldwide, according to the company's chief financial officer, Brian Olsavsky.

‍

Impacts of the Supply Chain on the Prime Delivery Window

From early access to exclusive sale items on Amazon Prime Day to speedy shipping options all year long (two-day, one-day, and same-day delivery), Prime members get it all.

Additionally, Prime members can easily share their Prime benefits with one individual for no extra cost. These include free Amazon delivery and streaming access, free shipping at Shopbop, and premium shipping at Zappos. Amazon Prime members enjoy various benefits, which help increase the number of new subscriptions every year.

However, did you know that supply chain issues have affected the delivery window, resulting in next-day and 2-day prime orders not arriving according to schedule?

Due to the many orders Amazon receives regularly; shipping delays are unavoidable. When more orders are placed online during high volume shopping, such as holidays, back-to-school days, or even worldwide crises, high volume shopping timeframes get affected.

Even if you have an Amazon Prime membership, it's possible that the next item you purchase will not be eligible for free two-day shipping.

‍

The Reaction of Amazon Prime Members on Delivery Delays

People joined Prime and paid $119/year for the 2-day shipping; for them, this is a big deal. Many customers have expressed their concerns regarding the delivery delays. 2-day Prime shipping changed into 5, 6, or even 7-day shipping has nothing to do with UPS or the USPS. Amazon NOW states that the "2-day shipping guarantee" applies only to the time it takes for them to complete your order and ship it out; the blame is entirely on Amazon.

Here are the updated "delivery benefits" for Amazon Prime members.

Customers' patience has been challenged due to the COVID-19 outbreak. Many of the perks they received from Amazon, such as free two-day shipping and an unlimited library of affordable products, are no longer guaranteed.

For out-of-stock warnings, long-delayed delivery dates, and higher costs, it's easy for customers to point the finger towards Amazon. This, however, is not the case.

People are aware of the pandemic situation and are not frustrated to cancel their subscriptions. Interestingly, the "regular Prime account" is stuck at 4-7 days for delivery. However, since Amazon Prime offers a slew of other benefits in addition to delivery, people believe that it is still worth it.

‍

Will Amazon Prime Change the Entertainment Industry Forever?

The invention of television opened doors for new entertainment in the world. Shows like FRIENDS. made us laugh, The Simpsons made the kids happy, and when shows like The Price is Right and Wheel of Fortune were aired, we even fought for the correct answers like it meant something. This was widely regarded as the peak of American television, and it brought us all together every evening: one family, one nation, one channel, and one culture.

Due to advancements in technology and the passage of time, the entertainment industry has seen numerous transformations. It has significantly altered how people enjoy their favorite shows. Today, the development of streaming services such as Amazon Prime Video, Netflix, Hulu, Disney+, AppleTV+, and even YouTube has drastically changed how a typical person watches T.V., adding an entirely new dimension to the home entertainment experience.

Netflix has taken advantage of its position as the first and leading name in digital video streaming to attract over 200 million users worldwide. You might be surprised to learn that Amazon has 150 million subscribers, making it the second most popular video streaming service in the world. There was a spike in demand during the pandemic because Prime Video subscription is bundled with Amazon Prime membership.

‍

Will Amazon Lose Any Customers with Price Increase?

Asking the question "How much would you be willing to pay for Amazon Prime?" is similar to asking how much you would be willing to pay to continue using Google. It's so deeply entrenched in our daily lives that it has achieved a status of near-ubiquity. In simple words, it has become part of life, and putting a valuation on that convenience is difficult for many.

The cost of an annual Prime membership will increase from $119 to $139 in February 2022. Those who subscribe to Amazon Prime will notice their prices increase from $12.99 to $14.99 per month.

Following that, Amazon will gain millions of new members, and analysts predict that the company will not lose many customers once the latest subscription charges take effect on February 18th.

‍

Amazon Prime Subscribers – U.S.A. and Globally

In a recent announcement, Amazon stated that the company currently has more than 200 million Amazon Prime customers throughout the world. They also claim that Amazon Prime contributes to "$126 billion in value creation" due to the time saved by users who use the service. Since 2018, Amazon has doubled its Prime subscription base, increasing it from 100 million to more than 200 million.

In the United States, Amazon has 148.6 million Amazon Prime Members. An increase of 49.05 percent from the previous year's figure of 99.7 million The United States accounts for 74 percent of all Amazon Prime subscriptions worldwide. By 2022, the number of Amazon Prime members in the United States is predicted to reach 157.4 million.

‍

Summary

The internet's retailing behemoth is raising the price of its Prime delivery and media subscription from $119 to $139, a $20 increase annually. Those who pay monthly subscription charges will be paying $14.99 instead of $12.99 from March 2022. But why? Due to the rising costs fueled by inflation and the average hourly compensation of Amazon's employees to $18 per hour to battle labor shortages.

You might wonder, "Why am I paying for this?" This is unquestionably a significant price increase, but no other online services provide as much value as Amazon Prime. For example, Netflix is just a streaming website that does not offer any delivery benefits. For avid readers, video enthusiasts, and online shoppers, the prime benefits are enough to outweigh the increased subscription charges. To conclude, we’d confidently still say that Amazon Prime is definitely worth the money.

‍

‍