Amazon Prime: loved at almost any price

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An estimate 150 million Americans are members of the Amazon Prime shopping club, making it one of the most popular payment technology services in the United States. Most Americans are members, and many can’t imagine giving up the ability to order things on a whim and get them quickly at no additional cost.

Here’s a question for the diehard: Would you stick with Prime at any cost?

I ask this because some of the financial experts who follow Amazon have been speculating that the company could soon increase the price of a US Prime membership.

Prime’s most recent cost increase in the US was about four years ago, when the price went up to $ 119 from $ 99 for most people who pay annually. The previous Prime price increase was four years before that, which means it could be time for another bump. (Amazon has not said one way or another, and its public relations department did not respond to my questions Tuesday.)

People walk away from some products when prices go up, but it seems like almost no one abandons Prime. Among Americans who have been Prime members for at least two years, nearly 98 percent continue to renew, according to Consumer Intelligence Research Partners o CIRP, which surveys people looking for brands and investors.

Prime is one of America’s toughest consumer products. It seems to defy our price conscious trends. And Prime is another example of the power Amazon and other US tech giants have to rewire our brains.

Perhaps the most surprising (or least?) Behavior among Prime members: Michael R. Levin and Josh Lowitz, the co-founders of CIRP, told me they believed that when Prime prices went up, some people would ask Amazon for even more. This trend could be explained by the need to make a more expensive membership worthwhile. (Maybe you get more exercise when the cost of your gym membership goes up, too.)

But even Prime is not completely immune to the effects of higher prices. Levin and Lowitz say that when Amazon raises the cost of Prime, some people will turn to alternatives like the Walmart shopping club. They also said that Americans who paid for monthly Prime memberships tended to stop and restart more frequently than people who purchased annual Prime memberships.

Prime was a project that according to Jeff Bezos was a controversial idea at Amazon when it started in 2005. Amazon money nerds were appalled at the shipping costs the company suffered from early Prime members purchasing relatively expensive items. low and asked frequently.

Over time, the service has proven its worth to Americans and to Amazon. Perhaps more than any individual company decision, Prime has been what got Americans hooked on Amazon.

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

Prime is one of the ways Amazon has bent America to its will. Another example: when Amazon in 2019 said it would start changing the standard delivery time for US Prime members. from two days to oneAmericans began ordering immediate necessities like phone chargers at Amazon instead of going to the store, company executives said. This change in the behavior of millions of Americans was noticed almost immediately in Amazon sales.

I talk a lot in this newsletter about the need to be more aware of the influence that the decisions of technology companies have on us and our world. Facebook’s tweaks with its software have led political parties to decide make your campaign messages more negative and prompted more Americans register to vote. Apple’s way of earning revenue from apps has dictated the digital services that are available to us, and we don’t know if an alternate reality could be better.

Americans have shown that they are attached to Prime. We will see if a possible price change affects that.

Tomorrow I’ll explain my own shopping secret: I quit Prime.

We want to hear from our readers about your use of Prime. Tell us in the comments why you have a Prime subscription or not; If you have one, please let us know if you would be willing to pay more for it. We may publish a selection of responses in a future newsletter.


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