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Home » Amazon Raises Prime Membership Amid Supply Chain Bottlenecks

Amazon Raises Prime Membership Amid Supply Chain Bottlenecks

Amazon truck
A truck drives through an Amazon delivery station in Kearny, New Jersey. Photo: Bloomberg.
February 3, 2022
Bloomberg

Amazon.com Inc. is raising the annual fee for its Prime subscription service in the U.S. by $20 to $139, the first such increase since 2018.

For new Prime members, the price change will go into effect on Feb. 18 and will apply to current subscribers who renew after March 25, the company said Thursday in a statement as it reported fourth-quarter results. Amazon also raised its Prime monthly subscription to $14.99 from $12.99. 

The shares surged on the news in extended trading, even as Amazon posted robust financial results, fueled by a strong showing from its cloud services division. 

The Prime price increases were widely expected because the Seattle-based company has incurred billions in margin-eating costs to ensure packages get to customers amid supply chain bottlenecks and an acute labor shortage.

Prime, which offers subscribers shipping discounts, video streaming and other perks, helps Amazon convert occasional shoppers into loyal customers. Prime subscribers typically spend more on Amazon than non-members.

Amazon signed up a combined 60 million U.S. Prime members in 2020 and 2021, according to Consumer Intelligence Research Partners, bringing the total number to 172 million. The research firm attributes the surge in sign-ups to consumers’ stampede online during the pandemic.

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