The Seattle Times is reporting that Amazon announced the possibility of raising their Amazon Prime subscription fee by $20 to $40, which would bring it the yearly cost to $99 to $119. Amazon Chief Financial Officer Tom Szkutak made the announcement in a conference call where he also discussed the companies fourth quarter results. What’s making the company consider such a drastic price hike? Rising fuel and shipping costs.
From time to time, we pull back to see if the model is working. Customers certainly love Prime, but shipping costs have gone up a lot. Fuel costs have gone up a lot, Szkutak said.
Prime is not only a two day shipping service. Included in Prime membership are the Amazon Prime video service (a Netflix competitor) and the Kindle owners lending library. But a $40 (high end) price hike is a jarring hit to take. Will Prime members be willing to pay that much extra for the service? Hit the source link below for more on the story and more on Amazons financials.
Source: Seattle Times