Amazon raises prices for Prime members
Amazon is raising the price of its Prime membership in the U.S. from $119 to $139 annually, the first time the company has boosted the price of its popular subscription service since 2018.
SAN FRANCISCO - Amazon is raising the price of its Prime membership in the U.S. from $119 to $139 annually, the first time the company has boosted the price of its popular subscription service since 2018.
The new prices will go into effect Feb. 18 for new members, and beginning after March 25 for people who already have a membership. The monthly cost will also jump, from $12.99 to $14.99.
Prime, which the company said last year has 200 million subscribers, waives shipping costs on many products, and provides access to Amazon's video library, among other services. Amazon Prime Vice President Jamil Ghani said in a statement that rising wages and transportation costs contributed to the increase.
(Amazon founder Jeff Bezos owns The Washington Post.)
Amazon's Prime program has proved to have loyal members, and Amazon is betting that people will stick around, even with higher prices.
But some are growing weary of the price hikes.
"Again?" Shashi Bellamkonda, a marketing executive in Maryland, asked on Twitter. He added that he thinks people have gotten so used to the convenience that they're unlikely to quit. He personally will stay a member in part to watch Bollywood movies and Amazon shows from India.
Amazon announced the price hike in its quarterly earnings report, where it also said it made $14.3 billion in profit during the quarter - nearly doubling its profit from a year ago. Amazon's stock surged more than 17% in after-hours trading following the news.
Fellow big tech companies Microsoft and Google-parent Alphabet also pleased investors this quarter, but Facebook reported that its daily users dropped for the first time. Its stock plunged more than 20% following the news, erasing about $200 billion from its market value.
Amazon has fared well during the coronavirus pandemic, as people flock online to buy goods or stream movies. Despite the national labor shortage, the company was still able to hire 140,000 workers during its peak holiday shopping period, Chief Financial Officer Brian Olsavsky said on a call with media. But it's running into staffing issues early this year because of the omicron variant - workers are often out sick, causing others to work overtime.
“We’re running into that and it’s disrupting our operations,” he said.