Your Amazon Prime Subscription May Get More Expensive
In the future, Amazon Prime customers may have to hand over one or two extra $20 bills for the same service.
In a conference call with analysts on Thursday, the Seattle-based retail giant said it is considering increasing the price of its Amazon Prime service by $20 to $40. Chief Financial Officer Thomas Szkutak said the increase in transportation costs and the number of items available for free shipping as part of the subscription service were forcing the company to consider the change in price.
Amazon Prime is a subscription service that has been around for nine years and gives customers free shipping on select items and instant streaming of movies and television shows for $79 per year.
In the time since it was rolled out, the number of items eligible for free shipping with Amazon Prime has increased from 1 million to 19 million, Szkutak said on the conference call. At the same time, Amazon Prime customers buy more than non-member customers, he added. There are “tens of millions” of Amazon Prime customers around the world, but Szkutak declined to provide subscription numbers for the U.S. alone.
The company would not comment on when or how the price rollout would potentially happen.
The announcement was part of Amazon’s earnings report. Sales for the three months ended in December were $25.59 billion, up 20 percent from the $21.27 billion reported in the same quarter a year ago. Meanwhile, net income was $239 million, up from $97 million in the same quarter a year earlier. And earnings per share for the fourth quarter were 51 cents, up from 21 cents a year ago.
Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.