Amazon Considers Price Hike for its Prime Membership Service
Many customers might have realized that signing up for Amazon’s Prime membership is a good deal itself. That is because the service offers free two-day shipment as well as access to the company’s streaming video. The online retailer has admitted that demand and usage for Prime has been steadily increasing.
But the company has just announced that it is considering setting a price hike for Amazon Prime. This may translate to an increase in membership cost by about $20 to $40. The service presently requires annual membership fee in the US of $79.
In a brief statement, Amazon said it has to take into consideration the increasing cost of transportation and fuel along with higher usage of the service among Prime members. It said such factors inevitably prompt for a price hike.
Keeping price steady
According to Tom Szkutak, Amazon CFO, the price of Prime membership has remained at its current level since its launch about nine years ago. He added that this program now covers over 90 million items. This may mean that the service has really become popular among practical users.
Mr. Szkutak said more Prime members must have realized the practicality of the shipping benefit. Thus, demand for the service has risen ‘dramatically’ since the launch of the program. He revealed that most of the members are now ordering more items in more categories probably to take advantage of the free two-day shipping offer.
Right now, the company said it could not elaborate further on this possibility. Mr. Szkutak said details about a possible price hike in Prime are still being deliberated. Some users are already calling for installment basis in annual fee payments. Others think that setting up tiers would make the service reasonable despite a possible price hike.
Mr. Szkutak clarified that in terms of possibly tiers on the service, he can’t actually speculate. But he did not rule out the possibility that it may be rolled out in the future.
Amazon Prime remains as among the most popular programs offered in its industry. Although members are asked to shoulder annual membership fees, many of them realize that the service is
still very practical. The benefit of Prime is usually realized more during the holiday shopping season, when most costs of shopping usually rise. There is no other information available about the possibility of the service requiring additional or higher fees.