Just a week after Amazon disclosed the eye-catching number of its Amazon Prime membership, the e-commerce giant has decided to initiate a $20 hike in Prime membership that it rolled out in 2005. From May 11 onwards, the new U.S. subscribers will have to shell out $119 to unlock the perks the online retailer offers. The current Prime subscribers have to pay the new fee from June 16.
For the first time, Jeff Bezos’ consumer obsessed company spilled the beans on how many people in the world have signed up for Prime and it is 100 million. Earlier this year, Amazon also scaled its monthly rate for Prime membership to $12.99, an 18% jump from the previous rate of $10.99. Amazon began offering monthly subscription since 2016. The last time Amazon revised its Prime charges was in 2014 when the subscribers paid an annual fee of $79.
According to the company, the new $20 hike in annual prime membership fee will help it to cover the higher cost that is needed to maintain the program. This price is justified by the company as it has added many benefits to Prime since 2014. Amazon’s Prime two-day free shipping now covers close to 100 million items, much ahead of 20 million items in 2014.
This increase in sign-ups helped Amazon post 60% hike in its subscription revenue during the latest quarter to $3.1 billion. The company’s total sales jumped 43% to $51 billion. In 2017, Amazon claims to have shipped over 5 billion items via Prime. The total membership for Prime might have received a boost from its launch in Singapore, Netherlands and Mexico.
However, the e-commerce titan has not offered any clues on whether it has got any plans to revise the rates of Prime for its customers outside the U.S. Given the popularity of Amazon Prime, it is difficult to predict the impact of price hike on its U.S. based customers. Maybe the next quarter results might show some light on the price hike impact.