Amazon is raising the price of Prime membership, increasing the annual fee from $119 to $139.
The news was revealed as part of the company's fourth-quarter earnings report.
The monthly charge will increase to $14.99 from $12.99. The price changes will take effect on February 18, and current Prime members will be charged the new fee after March 25 on their next renewal date.
The price increase will help Amazon offset some of its expenditures, which have risen in recent quarters owing to labor shortages, higher wages, supply chain difficulties, and increased shipping costs.
“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron,” Amazon CEO Andy Jassy said in the company’s earnings release.
The last time Amazon raised the price of a Prime membership was in 2018, when it went from $99 to $119 a year. In 2014, the price was raised from $79 to $99.
Amazon's membership program is a critical aspect of the company's operations. Free delivery is a crucial Prime benefit, along with additional perks like streaming movies and music, cloud storage, Whole Foods savings, and more.
Amazon has made significant investments in its logistics network in order to make one-day delivery the standard for free Prime shipping. Since 2018, the number of metros where same-day shipping is offered has increased from 48 to over 90, and the number of items eligible for Prime free shipping has more than doubled.
Amazon spent $23.6 billion on shipping in the fourth quarter, up 10% year over year.
As of April 2021, there are more than 200 million Prime members worldwide.
Netflix and Hulu, for example, have just announced subscription price increases.
Walmart, an Amazon competitor, has its own membership club, Walmart+, which costs $12.95 per month or $98 per year.
Source: Geekwire
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