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.