What the Tech: Amazon Prime raises price

Local News

Try to wrap your head around this: There are over 100 million subscribers to Amazon’s Prime membership and the company is increasing the annual price by $20. The math says that’s a $2 billion increase in Amazon’s revenue. If you started out with Prime in the early days you were paying $79 a year but starting with the next time your membership dues renew you’ll pay $119. So you may be asking yourself: is it worth the extra cost?

I’ve questioned it myself now that I can find the same items at my local retailers for the same price as they’re sold at Amazon. Walmart, Target, Best Buy match most Amazon prices and stores such as Lowes and Home Depot match the price plus will give you an extra 10 percent of the advertised price.

I cannot justify paying $120 a year just on saving money on the millions of products sold by Amazon. I decided to see how much I would need to buy at Amazon in order to break even on saving money for shipping. As you know, Amazon Prime members get two-day free shipping on any item purchased that is fulfilled by Amazon.

To get a handle on the difference in shipping costs I shopped at Amazon using a non-Prime account. First I placed a 30-ounce tumbler, one of Amazon’s Deals of the Day in my cart. The tumbler itself was on sale for $13.49. Without Prime, I would have to pay another $5.99 for shipping which brings the total to $21.28. On top of the added cost, the tumbler wouldn’t arrive at my house for five days. Using a Prime membership the cost of the item was the same but shipping was free and it would arrive in two days.

Then I compared the cost and shipping of an item priced above $25. Shipments of $25 and over are free whether you’re a Prime member or not. The difference though is that with a Prime Membership the item would arrive the next day. Without Prime, the free shipping wouldn’t get it to my house for five to seven days. Without Prime, I’d choose to buy items locally.

If it doesn’t matter to you whether items are delivered in two days or six days, you’d need to purchase 20 items over the course of the year to break-even on the new $120 Prime Membership fee.

That isn’t the reason I’ll keep Prime though. I listen to music through Prime Music which is included for free. That keeps me from paying $10 or so a month for Apple Music or Spotify. I also use Prime Video to watch movies and TV shows over a Firestick streaming device. It’s also included for free with a Prime membership and keeps me (or could keep me) from subscribing to Netflix for another $8 per month.

Of course, I have a few Alexa devices scattered around the house and I enjoy a good book. Prime members get to read a book a month from a list of available titles.

As much as I thought I could go without Prime it makes more sense to come to grips with the $20 price increase. Still, I can’t get over the $2 billion-plus Amazon stands to see in revenue from a $20 increase.

The new subscription price went into effect May 11.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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