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Amazon hikes Prime membership to $99 per year

By Associated Press

LAST UPDATED: 08:51 a.m. HST, Mar 13, 2014

NEW YORK >> Amazon is raising the price of its popular Prime membership to $99 per year, an increase of $20.

It's the first price increase since the online retailer introduced its Prime membership program, which includes two-day free shipping on many products, in 2005. The company said it would probably raise the price by $20 to $40 in January.

The hike will apply to users when they renew their membership. Users who renew membership before April 17 will pay $79 for the year. After April 17 the price will change to $99. New customers that start a free trial between now and March 20 will lock in the $79 rate for the first year.

Amazon has spent heavily to grow its business and expand into new areas, from movie streaming to e-readers and groceries, and it has accomplished that goal.

The company said it added a million new Prime members in the week before Christmas and a surge in online ordering in the U.S. contributed to huge delays for people sending gifts just ahead of the holiday.

But that has rankled some investors, who are looking for bigger returns.

In an email Thursday to members, the Seattle company stressed that it has not raised the price on Prime in the nine years since its launch, even though shipping costs have increased and it has added new services, such as video streaming. The number of products available for two-day shipping has grown to 20 million from 1 million.

Amazon doesn't disclose how many Prime members it has, but it said in December that it has "tens of millions" of members worldwide.

Cowen & Co. analyst John Blackledge estimates there are about 23 million U.S. prime members. Blackledge said that since the bulk of new memberships occur in the fourth quarter, around the holidays, the benefit of the price hike will probably be felt next year.

He added that he doesn't expect the continued growth of Prime members to slow down despite the price increase.

The announcement was an immediate hit with investors.

Shares rose $10.05, or 2.7 percent, to $380.69 during morning trading. The stock is down 7 percent since the beginning of the year.

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Maneki_Neko wrote:
Great service but recently Amamazon shifted from Fedex/UPS delivery to Post Office service and the 2-day delivery window is now more like 5-7 days. Still. given the price savings and availability of products compared to the local market, the annual fee makes sense and so convenient!

I just hope that our political weasels keep their grubby paws off taxing internet sales.

on March 13,2014 | 08:17AM
cojef wrote:
When taxes are involved, you can bet you last bottom dollar that it will be enacted. California forced Amazon to do so, the biggest inter-state vendor and other states will likewise do so. California has always provide a space on their tax return for collecting use taxes for out-of-state purchases made by local residents. How much taxes they collect through this method is unknown. Al Capone got nailed for failing to pay his income tax, well don't know how many Californians got sent to he slammer yet?????
on March 13,2014 | 10:01AM
kiragirl wrote:
Amazon's shipping department is the best. Always packaged neatly and expediently shipped.
on March 13,2014 | 10:46AM
PMINZ wrote:
Myself and the company are still receiving orders from Amazon VIA UPS , FEDEX, and also USPS. But most of my smaller items are coming in VIA USPS. I have had poor service from UPS for over a year and prefer USPS.
on March 13,2014 | 11:59AM
Usagi336 wrote:
I'm just happy that there's still a place that will ship free to Hawaii. Most internet sites won't ship to Hawaii at all. And if they do, it would be for an arm and a leg.
on March 13,2014 | 09:55AM
Meleana22 wrote:
A lawsuit was just filed against AMAZON claiming that their Amazon Prime delivery vendors were told by Amazon to raise the price of their merchandise to compensate for the "free delivery" losses to their revenue.
on March 13,2014 | 10:38AM
Maneki_Neko wrote:
Yeah, Amazon now disclaims the Prime prices and notes that other sellers may have lower prices before shipping is factored in. I do a lot of buying from Amazon and while Prime is not necessarily the lowest cost for the product itself, the free shipping almost always makes it a better deal. Almost always - sometimes I find a price locally that is the same as the Prime price and then I buy locally but that's pretty rare and usually a sale item. The free streaming and the free access to a new book/month are pluses too.
on March 13,2014 | 11:56AM
GooglyMoogly wrote:
This does happen, but it's not a blanket policy. I've tested it myself and have seen higher prices when I log in with my Prime account, but I was also looking specifically for items with a price discrepancy. The things I normally buy were either priced same or the difference was negligible. I guess YMMV.
on March 13,2014 | 12:07PM
residenttaxpayer wrote:
$20.00 increase is a lot for me as I subscribe for the video streaming and rarely order merchandise......
on March 13,2014 | 10:56AM
GooglyMoogly wrote:
I'm afraid you may be stuck with paying if you want access to a streaming service. Netflix runs about 110 a year for streaming-only service.
on March 13,2014 | 12:08PM
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