Amazon plans to increase prices for its U.S. Prime subscription service to $119 from $99 per year.
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Amazon hikes cost of Prime as stock surges to record high
Last Updated Apr 26, 2018 6:05 PM EDT
Amazon (AMZN) delivered a monster first quarter earnings report, sending the stock soaring after hours to a record high.
The Seattle-based company reported a 43 percent jump in revenue to $51 billion. Net income totaled $1.6 billion, up from $724 million in the same period a year earlier.
The company plans to increase prices for its U.S. Prime subscription service to $119 from $99 per year. The change will take effect May 11 for new customers and June 16 for customers renewing subscriptions. There are more than 100 million paid Prime subscription members globally, Amazon CEO Jeff Bezos said earlier this month.
"We always evaluate the price of Prime," Amazon CFO Brian Olsavsky said on the call, adding that the price had not increased since 2014. "There's all kinds of new features we've continually added to the Prime program...it's a reflection of the cost value of the program," he said.
Amazon's cloud-based services, called Amazon Web Services, were a bright spot, with revenue up 49 percent to $5.4 billion. The segment provides cloud computing, database and storage services for developers, academic institutions and governments.
In a statement, Bezos called out the division. "AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down," Bezos said.
Amazon's stock jumped more than 6 percent to nearly $1,613 a share.
The Associated Press contributed to this report.
https://www.cbsnews.com/news/amazon...increase/?ftag=CNM-00-10aab8d&linkId=51008142
Still a bargain.
Same here for me
I dropped my Prime subscription like a year ago
I never really watched the movies, especially since I had Kodi & SetTv & Terrillium
And I didn't really buy that much to justify paying $100+ for faster shipping
Hell, I can still get free shipping on some items, but just have to wait a few days longer
still cheaper than netflix and then free shipping
You had to tell people to buy Amazon stock the last 5 years....did you also have to tell them to buy Google Apple Celgene and Netflix?
Motherfuckers......and I’ll still keep it damnit 
Amazon to raise Prime membership in US to $119 from $99
The 20 percent price hike goes into effect May 11 and hits existing customers' renewals on June 16.
Ben Fox RubinApril 26, 2018 2:42 PM PDT
This is only the second time Amazon has increased the annual Prime fee.
Ben Fox Rubin/CNET
The annual price of an Amazon Prime membership in the US is going up by 20 percent.
Amazon finance chief Brian Olsavsky said Thursday that his company will hike Prime's fee to $119 a year, from $99, on May 11. The new price will apply to existing Prime members' renewals starting June 16. Olsavsky made the comments during an earnings call with analysts. If your regular renewal is on or after June 16, you won't be allowed to prepay for another year at the currently lower rate, an Amazon spokeswoman said.
It's only the second time Amazon has increased the cost of its annual Prime membership since it was first introduced in 2005, with the company in 2014 raising the price to $99 from $79.
Despite those few increases, the boost to Prime's fee -- particularly above the psychologically significant $100 level -- could threaten future renewals and new Prime customers. Prime is one of the company's most important businesses, helping build loyal, repeat customers who tend to spend about twice as much with Amazon than non-Prime shoppers.
Prime's biggest customer base is in the US and most of those members sign up on an annual -- instead of monthly -- basis. That means tens of millions of US customers will be affected by the change.
Amazon CEO Jeff Bezos just last week revealed that Prime hit over 100 million paid members worldwide, owed in part to the company's continued push to add new benefits, including the Prime Video streaming service, more same-day shipping, the Prime Now rapid delivery program and the Prime Day annual sale.
"We still feel this is the best deal in retail and we work to make it better and better every day," Olsavsky said on the call.
He added that the price hike was partly to reflect the higher costs of offering Prime, with its rising shipping fees and additional perks. The number of eligible items for two-day shipping at no additional cost increased in recent years from 20 million to more than 100 million items in the US, the company said.
The cost of the new annual membership remains a better deal than the monthly fees, which amount to $155.88 a year. Amazon raised the price of monthly US memberships in January by 18 percent to $12.99.
One way Amazon has been able to boost membership fees without raising the annual price beyond $100 was by creating a bevy of add-on subscriptions,such as Prime Pantry, Amazon Music Unlimited and Audible Channels. That effort, perhaps, wasn't doing enough to help Amazon recoup its rising shipping costs for Prime members.
Amazon's first-quarter earnings, which were also reported Thursday, were again strong, with the company posting its second consecutive quarter of over $1 billion in profit. Shipping costs in the quarter rose 38 percent from a year earlier to $6.1 billion. Subscription fees, which include Prime memberships, rose 56 percent to $3.1 billion from a year earlier.
Michael R. Levin, co-founder and partner of Consumer Intelligence Research Partners, said Amazon will likely take a temporary hit from the price hike, with some Prime members opting not to renew and others avoiding signing up.
But, with Prime experiencing strong renewal rates, at over 90 percent after the first year and even higher after the second year, he said most customers will accept the higher price.
"After you sign up for that second year, they've got you for life, man," Levin said. "This is a pretty strong signal that they're pretty confident that they'll keep a lot of members."
Blockchain Decoded: CNET looks at the tech powering bitcoin -- and soon, too, a myriad of services that will change your life.
Follow the Money: This is how digital cash is changing the way we save, shop and work.
Amazon to raise Prime membership in US to $119 from $99
The 20 percent price hike goes into effect May 11 and hits existing customers' renewals on June 16.
Ben Fox RubinApril 26, 2018 2:42 PM PDT
This is only the second time Amazon has increased the annual Prime fee.
Ben Fox Rubin/CNET
The annual price of an Amazon Prime membership in the US is going up by 20 percent.
Amazon finance chief Brian Olsavsky said Thursday that his company will hike Prime's fee to $119 a year, from $99, on May 11. The new price will apply to existing Prime members' renewals starting June 16. Olsavsky made the comments during an earnings call with analysts. If your regular renewal is on or after June 16, you won't be allowed to prepay for another year at the currently lower rate, an Amazon spokeswoman said.
It's only the second time Amazon has increased the cost of its annual Prime membership since it was first introduced in 2005, with the company in 2014 raising the price to $99 from $79.
Despite those few increases, the boost to Prime's fee -- particularly above the psychologically significant $100 level -- could threaten future renewals and new Prime customers. Prime is one of the company's most important businesses, helping build loyal, repeat customers who tend to spend about twice as much with Amazon than non-Prime shoppers.
Prime's biggest customer base is in the US and most of those members sign up on an annual -- instead of monthly -- basis. That means tens of millions of US customers will be affected by the change.
Amazon CEO Jeff Bezos just last week revealed that Prime hit over 100 million paid members worldwide, owed in part to the company's continued push to add new benefits, including the Prime Video streaming service, more same-day shipping, the Prime Now rapid delivery program and the Prime Day annual sale.
"We still feel this is the best deal in retail and we work to make it better and better every day," Olsavsky said on the call.
He added that the price hike was partly to reflect the higher costs of offering Prime, with its rising shipping fees and additional perks. The number of eligible items for two-day shipping at no additional cost increased in recent years from 20 million to more than 100 million items in the US, the company said.
The cost of the new annual membership remains a better deal than the monthly fees, which amount to $155.88 a year. Amazon raised the price of monthly US memberships in January by 18 percent to $12.99.
One way Amazon has been able to boost membership fees without raising the annual price beyond $100 was by creating a bevy of add-on subscriptions,such as Prime Pantry, Amazon Music Unlimited and Audible Channels. That effort, perhaps, wasn't doing enough to help Amazon recoup its rising shipping costs for Prime members.
Amazon's first-quarter earnings, which were also reported Thursday, were again strong, with the company posting its second consecutive quarter of over $1 billion in profit. Shipping costs in the quarter rose 38 percent from a year earlier to $6.1 billion. Subscription fees, which include Prime memberships, rose 56 percent to $3.1 billion from a year earlier.
Michael R. Levin, co-founder and partner of Consumer Intelligence Research Partners, said Amazon will likely take a temporary hit from the price hike, with some Prime members opting not to renew and others avoiding signing up.
But, with Prime experiencing strong renewal rates, at over 90 percent after the first year and even higher after the second year, he said most customers will accept the higher price.
"After you sign up for that second year, they've got you for life, man," Levin said. "This is a pretty strong signal that they're pretty confident that they'll keep a lot of members."
Blockchain Decoded: CNET looks at the tech powering bitcoin -- and soon, too, a myriad of services that will change your life.
Follow the Money: This is how digital cash is changing the way we save, shop and work.
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That’s how they get you
Jeff Bezos Boosts Fortune by $12 Billion in a Day on Amazon Surge
https://www.bloomberg.com/news/arti...-by-12-billion-in-a-day-as-amazon-sales-surge
https://www.bloomberg.com/news/arti...-by-12-billion-in-a-day-as-amazon-sales-surge
Yep, and you can get free shipping from amazon pantry if you purchase is over $35, you can also price match amazon with walmart and target and get free shipping. If I need video streaming netflix is a better deal.
Nor can they fuck with their customer service; Amazon is second to only maybe Nordstrom in terms of CS and definitely head and shoulders above every other mass retailer.
don’t know about that , I bought a tv stand from amazon seller not third party
When I got it 2 days later the price dropped $50
They wanted me return the tv stand and reorder instead of giving me the $50
I told them you want me to return this big ass tv stand in perfect working condition and order again
Phew!
Glad I just renewed my membership a few weeks ago.
I wonder if they're copying this business model
Glad I just renewed my membership a few weeks ago.
I wonder if they're copying this business model
I thought this post was about the new amazon fire tv cube.
The 5% cashback Amazon Visa is extremely fucking clutch though; when the math works I’ll use it to order from Amazon vs going to Target or Meijer if it’s not an immediate need.
Now that Amazon owns Ring. this should be free.
https://shop.ring.com/pages/protect-plans
Protect Basic
$30 per year
or $3 per month
Protect Plus
$100 per year
or $10 per month
https://shop.ring.com/pages/protect-plans
Protect Basic
$30 per year
or $3 per month
Protect Plus
$100 per year
or $10 per month
and music... and i always forget
i'm sure they are going up because of the new lord of the rings series
As much as I purchased from there, that free shipping saves a shit ton of money. Looks like I’m going to have to take this hit to the jaw. Greedy bastards. Fuckers get a tax cut and still raise the prices. Assholes.