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Businesses The Almighty Buck

Price of Amazon Prime May Jump To $119 a Year 298

colinneagle writes "Amazon CFO Tom Szkutak hinted during the company's earnings conference call [Thursday] that we might see an increase to the company's popular Amazon Prime service. As it stands now, Amazon Prime costs $79 per year and offers users free shipping on millions of items, free book borrowing for select Kindle titles, and last but not least, free streaming to the company's video on-demand service. Going forward, Amazon may increase that pricepoint to either $99 or $119. That's a rather significant price increase, but it's important to keep in mind that the price of Amazon Prime has remained the same ever since Amazon first started the program nine years ago." How many products do you use that haven't increased in price for that long?
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Price of Amazon Prime May Jump To $119 a Year

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  • how many products? (Score:5, Insightful)

    by gl4ss ( 559668 ) on Saturday February 01, 2014 @06:34AM (#46127249) Homepage Journal

    hmm lets see.

    isp is cheaper now than 9 years ago.
    the tv I got at back home I could not have afforded 9 years ago.
    my mobile subscriptions are cheaper than 9 years ago. I can order stuff from china cheaper than 9 years ago(transportation costs).

    • What about cost of living?
      • by Anonymous Coward on Saturday February 01, 2014 @07:14AM (#46127371)

        I spend way too much on living. I'd save lots of money if only I could shake my food addiction. I tried going cold turkey but then I developed an overwhelming craving for cold turkey.

        • wouldn't a better punch line be...

          "i tried going cold turkey, but then I developed an overwhelming craving for hot turkey."?

      • by Trepidity ( 597 ) <delirium-slashdot.hackish@org> on Saturday February 01, 2014 @07:56AM (#46127463)

        Depends on where you live and what your costs are. Real-estate prices are down in some places and up in others. Oil prices are up considerably from the '90s, though roughly flat for the past few years. Natural-gas prices are up in Europe, but way down in the U.S. due to the shale-gas boom. Food prices are relatively stable overall, though specific food items have gone up or down. Amortized cost of car ownership has gone down, due to a mixture of cheaper initial-sales prices and longer average lifespans. Amortized cost of ownership of a family computer suitable for basic email/web has gone way down, due to advances in technology. Airfare has gone down in Europe (due to competition from low-cost airlines), but up in the U.S. and internationally (due to increased oil prices, plus maybe related to airline consolidation). Etc., etc.

        So, if you live in Pittsburgh, use a lot of natural-gas for heating, drive a basic car relatively short distances, and have a home computer, your overall cost of living has probably declined over the past 20 years. On the other hand, if you live in Boston, take frequent roadtrips or plane trips, and heat you apartment with fuel oil, your cost of living has probably increased over the past 20 years.

        Of all these, rent/housing costs are typically the dominating factor in most CoL equations.

    • by MickLinux ( 579158 ) on Saturday February 01, 2014 @08:16AM (#46127527) Journal

      Generally speaking, we are in deflation, not inflation. So as the commenter correctly points out, a lot of things are decreasing in price.

      Here's the problem: our wages are also decreasing.

      Here's another problem: a lot of things -- especially thing which we are *legally required* to buy from one source-- are increasing in price. So housing, electricity, union leadership, health insurance, the cost of government, public schools, taxes, bailouts... all are crashing through the roof.

      Basically, if the purveyor thinks he has a captive market, he's grabbing everything he can.

      But, that being the case, the appropriate question is not as the original headline, "how many things haven't increased in price in that long", it is instead, "how many things, when they increased in price 25- to 50-%, did you have the option to not buy, and still continued to buy?"

      Typically speaking, when something went up in price 25- or 50- percent, I stopped buying it. That is, my purchases went to something like 5% of what they had been before. Often, I stopped buying it completely, because I had the incentive to find better alternatives. Once I had the better alternatives, I was done.

      Here's a better question: in today's era of retail cannibalization, how will Amazon's market share hold up if they increase prices?

      • Re: (Score:3, Insightful)

        by Lumpy ( 12016 )

        Nothing is decreasing in price. Please name ONE thing that is still the same quality as before but is lower in price.

        HDTV's are garbage quality compared to what was out 10 years ago, yes UTTER garbage. They used to be repairable by swapping out separate boards, today they are throw-away items because they are made as cheap as possible. Electronics in general are utter crap quality compared to 10-20 years ago. THAT is why it's cheaper.

        You are paying less for a lesser product.

        • by TheGratefulNet ( 143330 ) on Saturday February 01, 2014 @11:53AM (#46128361)

          Please name ONE thing that is still the same quality as before but is lower in price.

          m job ... ;(

          have not had a raise in a long long LONG time. essentially I went backwards about 10 yrs ago and never caught back up again with the cost of living. my software and hardware skills are as good (or better) than 10 yrs ago but I'm paid LESS, overall.

        • Well, bicycle components, for example (the better ones).
          A decent aluminium bike frame is way cheaper, than 10 years ago, and at the same time better, because the technology is mature. Same goes for hydraulic disc brakes.

          • This is probably one of the best examples. Bicycle prices have come way down. For $1000 you can get a bike that is better than what the pros were using 15 years ago. For a little more you can get a competitive racing quality bike. You can spend a lot more, but it won't help you that much. However, I find that quality on the low end has tanked. Most department store bikes used to be decent quality, and now they are mostly complete garbage. And they are almost exclusively designed to look impressive (suspensi
    • Plus the products we sell are the same price they were 10 years ago. We've offset cost increases by increases in productivity, and our margin has actually gone up. I have prime, I would drop it if it goes up. I also have Netflix, which kicks Amazon's ass when it comes to video interface. Amazon is constantly trying to up sell you, making it much harder to find and enjoy videos than Netflix. Right now, I have Prime only for the shipping savings.

      • I enjoy the convenience of Web shopping for personal and professional use.

        I can order from online companies I have never heard of, without fear of being cheated, when they are under the umbrella of the Amazon corporation. This is their prime benefit to me.

        The reduced prime membership rates also include a nominal fee (sometimes $3.99) to upgrade to one day shipping... very handy when shopping parts for a job. It is still almost magical to me that I can order something from a city 1500 miles away at 1400 h

  • by Anonymous Coward on Saturday February 01, 2014 @06:39AM (#46127269)

    "Sumsing vwrong here!"


  • by Anonymous Coward

    According to the US federal reserve governments are printing billions of dollars all over the world to prevent the horrible horrible deflation that might happen. Why there has been no rising prices in stocks, food, commodities, or cars, or anything. Nope no inflation anywhere.... Just like all the unemployment numbers are perfectly fine and everyone is doing much better. After all gold is super cheap. I don't possibly see why Amazon would jack up prices all of the sudden, especially since its been ma

  • by reboot246 ( 623534 ) on Saturday February 01, 2014 @06:49AM (#46127311) Homepage
    Just in the savings in shipping costs it would still be a bargain for me. I order a boatload of stuff from Amazon, and watch their steaming service all the time. I think of their streaming service as my humongous DVR. Even at $119 per year we're still talking about less than $10 a month, just slightly more than my Netflix subscription. It's like having Netflix with the added benefit of free two day shipping.
    • by Lumpy ( 12016 )

      Your DVR? So you only watch obscure and really old things? I found them completely useless and every time I wanted to watch something I had to pay to watch it because it had an additional fee attached to it. Netflix blows them out of the water hard, and Hulu actually has TV shows in a timely manner.

  • Not sure I'd be paying for it for just one or the other, but the free shipping on eligible items and Amazon Video on my Roku make it a sweet deal.

    My coworkers get a laugh at how many packages I get, but for anyone who's busy, there are countless items that are just a pain to get in the store, but easy as pie to just show up in a box and bring home from work. (Have 'em shipped to work to avoid the whole randomness of where packages get left thing.)

    • by Trepidity ( 597 )

      Have 'em shipped to work to avoid the whole randomness of where packages get left thing.

      This is getting common enough that some companies are starting to complain, though. If a few people do it occasionally it's no big deal, but if 500 employees are each receiving multiple packages a week, it starts becoming a significant added burden on the corporate mailroom.

      • Re: (Score:2, Funny)

        by Anonymous Coward

        The mailroom staff are demanding bribes or they'll go postal.

      • by gnasher719 ( 869701 ) on Saturday February 01, 2014 @08:29AM (#46127549)

        This is getting common enough that some companies are starting to complain, though. If a few people do it occasionally it's no big deal, but if 500 employees are each receiving multiple packages a week, it starts becoming a significant added burden on the corporate mailroom.

        The relationship between company and employees, at first approximation, is that employees come to work, and the company pays them money. In a better approximation, employees do useful work to advance the purposes of the company, while the company does things to keep employees happy. Adding a person to the mailroom is a cheap way to make 500 employees a lot happier, so they will work for you instead of someone else if everything else is equal.

        • by Trepidity ( 597 )

          That's certainly an option. However around here, we got an email in December asking us to please not have all our Christmas shopping sent to the office address. No real enforcement, just "hey don't ship everything to the office pls". My guess is that this will become more common if more people start doing it: right now the people ordering from prime regularly to their work address at most workplaces are a pretty small proportion of employees, so it's not a big deal to accommodate them.

        • Adding a person to the mailroom is a cheap way to make 500 employees a lot happier, so they will work for you instead of someone else if everything else is equal.

          Sure, if the place you work for has the money to do this. The situation is where we work, we don't, and we can't get funding for a position like that. Quite a few people started to use work as the delivery address, and the higher-ups passed a new policy for no personal packages allowed to be delivered at work - they are flat-out refused. We don't h

      • by Lumpy ( 12016 )

        That is why you dont have it delivered to the mail room. Put in your address the Building Address and Suite. it get's delivered to the receptionist. Bypass themail room as much as possible and you end run the idiots in management. Be nice and buy the Receptionist lunch once in a while and she will never say a word.

        • by chihowa ( 366380 ) *

          That depends. I'm at a university and, no matter what I put for the address, the package always goes through the receiving department. Some companies are like that, too. This is especially true at places with restricted access to the buildings, in which case delivery trucks are only allowed to go to the receiving docks.

      • we have offices in various countries and we have foreign workers fly to the US for extended periods of time to work here. you would not believe the amount of amazon boxes that accumulate in our open office environ when the foreign workers 'go nuts' and buy everything they can from amazon before returning home.

        the funny part: most of the foreign workers are from china and the goods they buy are almost always made in china. but they are cheaper here and they buy from amazon, have it shipped to the company m

  • services have definitely decreased in prices, however the question is about products. HDTV's, books/magazines, and some popular prescription medicines (depending upon where you shop)...have all decreased in retail price over the last nine years.
  • by EmagGeek ( 574360 ) <(gterich) (at) (aol.com)> on Saturday February 01, 2014 @08:29AM (#46127551) Journal

    This makes perfect sense from a shareholder point of view. Raising the price to $119 will decrease the number of Prime members, thereby decreasing the cost of providing the Prime service, but the people who stay with Prime will likely more than pay for those who leave. So, it's a win-win for shareholders and Amazon.

    • This makes perfect sense from a shareholder point of view. Raising the price to $119 will decrease the number of Prime members, thereby decreasing the cost of providing the Prime service, but the people who stay with Prime will likely more than pay for those who leave.

      This logic is horribly flawed. Yes, it's possible that this will be the case, but it will really depend on a lot of factors.

      The main problem is your assumption that the people who would drop were the ones who weren't profitable to Amazon. This is not necessarily true.

      Let's take the shipping aspect. I bet a lot of people who pay for Amazon Prime don't order nearly as often as they assume they might. They just want stuff fast occasionally, so it's convenient. Maybe they only place an order every 4-6

  • by rayd75 ( 258138 ) on Saturday February 01, 2014 @08:39AM (#46127577)

    I find it interesting that this comes just as Amazon has fallen in love with hybrid shipping services such as UPS Mail Innovations and FedEx SmartPost for Prime delivery. These services utilize UPS or FedEx only to the destination city where your package is then handed off to the USPS for delivery. As a result, Prime "guaranteed" 2-day delivery has become "often 2-day" or "occasional 2-day" ...and now, they feel like this is worth more? Wow.

    Oh, they still haven't dropped the magic word "guaranteed". Their offering to satisfy the guarantee is an additional month of inconsistent, slower than stated service.

  • Computers have gone down in price.

    I paid $10,000 less for my new tractor than the one 12 years before and the new one is 50% more powerful.

    Music, DVDs and other entertainment cost less - I don't go to the theater which I hear costs more but the fact that it costs more is part of why I don't go.

    Amazon Prime has even less to delivery than computers so by your logic it should decrease in price over time.

  • by jpellino ( 202698 ) on Saturday February 01, 2014 @08:50AM (#46127609)

    ...it really doesn't need to be justified. It's a leash. Like your Sam's, BJ's or Costco membership. It makes you want to buy more stuff at Amazon (on account of you don't want to waste that $80 you handed them) and they make it all up on volume and margins. No way the $80 ever offset the shipping in any reasonable fashion. I get free shipping from Bean's and pay nothing up front for it.

    They do need to get more money though, if only to replace the drones that will no doubt be used for plinking practice by the neighbor kids.

    • by csumpi ( 2258986 )
      Disagree. It's not free shipping. It's free two day shipping. That's a big difference. The difference of having to spend a couple of hours to buy stuff at a store 10 miles away, vs having it on my doorstep in a reasonable amount of time. Many times it's there the next day. With two kids, this not only is worth it, it actually saves money big time for or family. Then throw in the occasional free instant video, it's golden.
      • Not always. Sometimes it is free shipping. Amazon Prime is a fantastic deal for folks not living in the continental US. And will remain so until they wise up and find that even more affiliates 'can't' ship to my destination address.

        Just had a propane grill shipped to Alaska. For free. Hard to beat that.

        I don't expect it to last. WalMart stopped free shipping to Alaska a while back. At present, the back of the UPS / FedEx trucks are just full of Amazon boxes. Is it a good deal for them? Who knows?

  • Having Prime makes me more likely to buy an item. In fact, when I search I generally click the "Prime" filter. Many of the items I won't buy without Prime because the extra shipping discourages me .It's not that I care all that much about the actual shipping cost, just the total price. When a retailer puts an artificially low price then tacks on a large shipping price then I get annoyed and don't buy from them. With Prime, I know the price I see is what I'll pay and have it there in two days.

    I don't use the

  • by SavvyPlayer ( 774432 ) on Saturday February 01, 2014 @09:18AM (#46127693)

    As a Prime member, for every non-prime eligible item I find, I look for a Prime eligible counterpart. The price for the counterpart is _always_ about $3-5 more expensive, usually by the same amount as the quoted shipping price on the non-Prime eligible item. So what we are getting here is the 2-day upgrade for free, not the entire cost of shipping. Most of the time, 2-day vs. 4-day shipping makes no difference to me.

    We do occasionally stream Prime content, but the vast majority of titles on Prime are also on Netflix. If I could cancel my Netflix subscription and replace with Prime, the $120 pricepoint might not look so steep, but alas, it often seems Amazon's library is only about 25% the size of Netflix, so that's not an option.

    So as it stands, I feel I am not really getting $80 in value from Prime as it stands. $120 with no improvement to the service is out of the question. I like the idea of a premium Amazon service, it just needs to actually _be_ premium.

    • by csumpi ( 2258986 )
      Except non prime items ship for $8. They just hide your "savings" in the shipping cost. So you still save $3-$5 on prime and you get it in two days vs a week. With extremely liberal free returns vs paying shipping on returns to 3rd parties.
      • Except non prime items ship for $8. They just hide your "savings" in the shipping cost.

        That is commonly untrue on items which cost any significant amount of money, which typically have free shipping.

        • by csumpi ( 2258986 )
          Ok. Sure. I can find a $400 GoPro Hero for free shipping.

          But how many of those you order a month? Vs soap, books, lightbulbs, undies and other small items that one needs quite often?

          Also, if you buy the $400 GoPro Hero through amazon prime, and there's an issue with it, they will ship you a new one before you drop yours, for free return, into a UPS box.

          Free shipping also means free shipping back. Free shipping also works on small items.

          Dude. You are missing the whole point.

  • "...How many products do you use that haven't increased in price for that long?..."

    Pretty much none. Of course, the government (of both parties) has been telling me "inflation's at/near 0%" for longer than that....

  • I never saw the fascination of Amazon Prime. I figured that, like most people on /., I'm not in the target demographic. I'm quite happy to wait 3-5 days for a package to arive. In addition, when I buy a movie, I like to hold the disc in my hand.

    Prime is for the people that must have what they bought now. Whatever happened to delaying gratification?

    • by guruevi ( 827432 )

      It's not really the wait time, it's mostly that almost all shipping is free. Where regular Amazon users generally pay a few bucks in shipping per order (yes, there are free 3-5 day shipping items but not everything is), Prime users don't pay anything at all AND they get a 2 day delivery. I order just about anything for my office from Amazon, the Prime cost is recouped in less than a month.

    • by sehryan ( 412731 )

      Amazon Instant Videos, which includes much better movies than are available via Netflix. $79/year breaks down to being cheaper than Netflix Streaming.

      The free two-day shipping is just a perk for me. You can also share Prime shipping with other Amazon accounts, which allows my wife (and the business she runs) to benefit from Prime with no additional cost.

    • As far as the free shipping goes - It's not just about two day shipping, the "free" (non-Prime) supersaver shipping option only applies on orders over $25. Ordering one book or one DVD won't qualify. Prime, on the other hand, lets you order something for $5 and not have to either find $20 worth of other stuff you don't really want, or add 20-50% to the price just to cover shipping costs.

      By itself that's of questionable value, but quite nice, but the fact Prime also includes a Netflix type streaming servi

    • Re:Why Prime? (Score:5, Insightful)

      by bill_mcgonigle ( 4333 ) * on Saturday February 01, 2014 @10:25AM (#46127923) Homepage Journal

      Prime is for the people that must have what they bought now. Whatever happened to delaying gratification?

      You don't go to stores? Prime is to replace driving to do store shopping, not getting a book you will read next month. Need an odd concrete anchor bolt you can't find at the little hardware store or Home Depot? Just get it on Amazon and save the hour and a half drive to the specialty concrete yard

      Our washing machine died, and I paid $4 to have the part here the very next day. Sears was a week plus shipping and double the price. What benefit would I have gained by waiting a week to fix the washer?

      • What I'm saying is that for the extra $79 a year, I don't see much value added over standard amazon. Especially since if your amazon cart is $50 or more you typically get free shipping anyway.

        So maybe it makes sense for you. I generally don't need that special part the next day. And for the rare times I do need something the next day, I go to a local store.

    • by csumpi ( 2258986 )
      Easy. Don't use it.
    • by Pulzar ( 81031 )

      I figured that, like most people on /., I'm not in the target demographic.

      I don't think you figured "like most people on /." part right. At least in my experience, just about every computer geek I know has Prime.

      Screw the delayed gratification. When I go to store to buy something, I get it right then and there. Online was always a pain because of the delay... Prime makes the delay very manageable.

  • In real dollars food costs far less than it did 30 years ago. Not everything goes up in price. In fact, accounting for inflation, a lot of things go down in price.

  • by jbernardo ( 1014507 ) on Saturday February 01, 2014 @10:16AM (#46127881)

    I have Prime for the German amazon, as it is the closest (less delivery time) to where I live, the prices are in euros, and has the most diversity of the European amazon stores.

    However, I have my kindle set to amazon.co.uk because I only understand a few German words, most my reading is in English, my magazine subscriptions (Analog) are available only from there or the US, and I'd rather read some of my favourite authors in the original UK English spelling.

    As such, I can't loan kindle titles (only if I had my kindle set to the German amazon), and of course I don't have the streaming. The interesting part here is that I can have prime either with German, French, Italian or UK amazon, without living in any of these countries, but I must pay a Prime subscription in each country, like if it was a different company and not the same one with headquarters in Luxembourg.

  • Smarmy answers to rhetorical questions....

    The Demonoid made me do it.

    Aaarrrrr. Aarrrrrrr...

  • Nine years ago, I could order whatever I wanted and have it delivered in two days.

    Now every item on Amazon is an "add-on item" that you can only get shipped to you if you're buying more than $25 worth of stuff. Making me pay $25 for extra stuff I don't need or want when I need toothpaste and deodorant is quite an increase in cost from nine years ago. Amazon Prime was almost $80. That $80 investment gives people quite an incentive to choose amazon.com, and it's not even like every item on amazon was availabl

  • I read an article some time ago that argued Amazon Prime should be free or nominal. I agree. Trying to make money off the membership fee is short-sighted. When I want something online I go immediately to Amazon, because they probably have it and it might be in the Prime program. If they keep raising the Prime fee, I might be at some point tempted to include some other service or services in my initial search, and when that happens Amazon will have lost the mindshare monopoly they own right now in my house
  • Likely I'll pay the price hike, but if they want to earn money, how about something like this. Currently (as many know) Shared Amazon Prime Members can only use the 2 day shipping benefits, not the Streaming Instant Video benefits. How about for $40/member/month more, change that? This way I don't have to beg my wife for her last login all the time and can use my account instead. Also perhaps, allowing 2 linked prime accounts who both have instant video access to get to each others separately purchased
  • by Rick Zeman ( 15628 ) on Saturday February 01, 2014 @12:22PM (#46128495)

    Costco hot dog and soda at the snack bar. Been $1.50 for nigh on 20 years.

  • by Anonymous Coward on Saturday February 01, 2014 @01:49PM (#46128969)

    When Amazon introduced Prime at $79, I evaluated it.
    It really didn't offer me enough to compensate for the $79 fee.
    Some people have a life style that the service at makes sense, at certain price points.
    I imagine there are some people for whom a Valet makes sense.

    For you it may be the greatest thing since slice bread.
    For me, the break even is very low. Lower than $79.

    It will be interesting to see what they do.

  • by russotto ( 537200 ) on Saturday February 01, 2014 @04:57PM (#46130039) Journal

    Things that are "bargains" will increase in price or decrease in quality or quantity until they are merely "ok" deals. Yet another reason economics truly is the dismal science.

"We don't care. We don't have to. We're the Phone Company."