Amazon has announced that it will be hiking the price of its Prime subscriptions in the US by 17 percent, in a bid to offset higher costs for shipping and wages. The company will be raising the fee from $13 to $15 per month, which translates to $139 per year (from $119). The new rates are set to come into effect from February 18 for new subscribers.
However, existing customers can enjoy their current plans until they renew their subscription on March 25 or later. You’ll need to purchase an Amazon Prime subscription by the aforementioned date to lock in a lower price.
Why the Price Increase?
An Amazon Prime subscription comprises various goodies such as free one-day shipping on Amazon, as well as access to Prime Video and Prime Music. The company cited higher wages and transportation costs and the “continued expansion” of Prime perks as the reasons behind the price increase. This is the first time that the corporation has raised its Prime membership cost since 2018.
The company announced its membership price hike in its earning’s release, which showed that its revenue climbed 9 percent in the fourth quarter to $137.4 billion. Its net income also jumped to $14.3 billion from $7.2 billion a year ago.
Amazon’s new CEO Andy Jassy attempted to offset its gains by stating that it still ran into some supply chain issue during last year’s holiday season. The CEO said in the earnings release that “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.”
