Amazon Prime price hike: Some members could pay more than $139
95% of Amazon members are expected to renew their subscriptions
The price of an Amazon Prime membership for new subscribers increased on Friday.
Earlier this month, Amazon announced that monthly and annual membership fees would rise and that new members would see the price change starting on Feb. 18. Meanwhile, existing members will see their fees go up on the date of their next renewal after March 25.
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Whether you're a new or current customer, though, Prime members who pay monthly will have to dole out even more cash for the shopping service than annual subscribers.
Annual memberships, according to Amazon, will increase from $119 to $139. By comparison, monthly Prime memberships will go from $12.99 to $14.99, which equates to about $180 each year.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AMZN | AMAZON.COM INC. | 207.89 | +2.15 | +1.05% |
Amazon attributed the increases to inflation, which is at the highest level in four decades.
The price hike was driven by increased wage and transportation costs along with its expansion of membership benefits, Amazon said in a letter to investors outlining its fourth-quarter earnings earlier this month.
Logos of Amazon and Amazon Prime are pictured on vehicles outside the Amazon Fulfilment Centre in Altrincham, near Manchester, Britain, November 26, 2021. (Reuters/Carl Recine / Reuters Photos)
It's the first time the membership prices have gone up since 2018, putting monthly subscribers, which account for over half of all members, seemingly in a worse position.
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A recent report from Consumer Intelligence Research Partners (CIRP) shows that monthly membership has "increased steadily" since 2016 when the Seattle-based shopping behemoth introduced the service. By December 2021, 52% of members were paying for monthly memberships rather than annual ones, according to the report.
The new fees kick in on Feb. 18 for new members. Meanwhile, existing members will see their fees go up on the date of their next renewal after March 25.
An Amazon truck driving on the interstate near Los Angeles, California, in 2019.
According to the data, which was collected before the price increase, more than 95% of monthly and annual plan members said that they would "definitely" or "probably" renew their membership.
INFLATION HITS AMAZON: PRICE OF PRIME MEMBERSHIPS GOING UP
However, Josh Lowitz, CIRP partner and co-founder, told FOX Business that the price increase will likely not affect that.
Even after previous price increases, "member retention rates have remained extraordinarily high," he said.
As the sticker price goes up, Lowitz says the monthly membership will also increase because the monthly fees are "more palatable" relative to the larger annual fee.
"The pandemic did benefit Amazon, since they were already established as the leading online retailer and were prepared to meet the increased demand for online shopping," he said. "The value of Amazon Prime membership became clearer to a growing population of online shoppers and Amazon retail was ready to meet the demand."
FOX Business' Breck Dumas contributed to this report.
