Amazon Prime: Loved at Almost Any Price


This article is part of the On Tech newsletter. Here is a collection past columns.

Approximately 150 million Americans are members of Amazon Prime’s shopping club, making it one of the most popular paid tech services in the United States. Most Americans are members and many cannot imagine giving up the ability to order on a whim and have it delivered quickly at no additional cost.

Here’s a heartfelt question for you: Would you stick to Prime at all costs?

I’m asking because some financial experts who follow Amazon are speculating that the company may soon raise the price of its US Prime membership.

Prime’s latest US cost increase about four years ago, when the price jumps from $99 to $119 for most people paying annually. Previous Prime price increase, four years ago, it may be time for another crash. (Amazon didn’t say one way or another, and its public relations department didn’t respond to my questions on Tuesday.)

When prices go up, people shy away from certain products, but it seems almost no one quits Prime. About 98 percent of Americans who have been Prime members for at least two years renew. Consumer Intelligence Research Partners or CIRP, which researches people for brands and investors.

Prime is one of America’s most durable consumer products. It seems to defy our price-conscious tendencies. Prime is another example of the power Amazon and America’s other tech giants have to rewire our brains.

Perhaps the most (or least?) surprising behavior among Prime members: CIRP co-founders Michael R. Levin and Josh Lowitz said they believe some people are ordering more from Amazon when Prime prices are rising. This trend can be explained by the need to make a more expensive membership feel worth the money. (Maybe you’ll work harder when the cost of your gym membership goes up.)

But even Prime is not entirely immune from the effects of higher prices. Levin and Lowitz say that when Amazon raises the cost of Prime, some people will turn to alternatives like Walmart’s shopping club. They also said that Americans who pay for monthly Prime memberships tend to stop and restart more often than those who buy annual Prime memberships.

Prime was a project that Jeff Bezos said was a controversial idea at Amazon when it first started in 2005. Amazon’s money enthusiasts are horrified by the shipping costs the company charges from early Prime members who buy relatively low-cost items and place orders frequently.

Over time, the service has proven useful to Americans and Amazon. Perhaps more than any decision made by the company, Prime has been what binds Americans to Amazon.

Shipping still costs Amazon a fortune, but Prime members mostly only shop online on Amazon. An analysis by Morgan Stanley last year estimated that Prime member households typically spend more than $3,000 a year with Amazon. Non-Prime spends half that on Amazon.

Prime is one of the ways Amazon has subdued America to its will. Another example: In 2019, when Amazon said it would start changing its standard delivery time for US Prime members every two daysInstead of going to the store, Americans are starting to order urgent necessities like phone chargers on Amazon, company executives said. This change in the behavior of millions of Americans was noticed almost instantly in Amazon’s sales.

In this newsletter, I talk a lot about the need to be more aware of the impact that tech companies’ choices have on us and our world. Facebook’s tampering with its software caused political parties to make decisions. make campaign messages more negative and requested more Americans will sign up to vote. How Apple monetizes apps dictated the digital services available to usAnd we don’t know if an alternate reality would be better.

The Americans have shown their loyalty to Prime. We’ll see if a possible price change affects that.

Tomorrow I will reveal my own shopping secret: I left Prime.

We would like to hear from our readers about their use of Prime. Please indicate in the comments why you have a Prime subscription; If so, let us know if you’re willing to pay more for it. We may publish a selection of responses in a future newsletter.


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