Amazon Prime Price Hike Will Hit Subscriber Base Hard

CommanderFrank

Cat Can't Scratch It
Joined
May 9, 2000
Messages
75,400
And the survey says: Amazon’s possible price hike on its Prime annual subscription fee may not be such a hot idea for the company at second glance. A poll of Amazon Prime customers indicated the higher fee will affect many in the decision to renew their subscription at the higher rate.
 
Well... we actually have to wait and see what happens. In many cases the primary users are heavy (and I mean heavy) consumers. That is, the value of Amazon Prime shipping is their main reason. For those that are Amazon Prime Instant Video users and low consumers... I think they'll be the first ones to drop the service (especially if they already subscribe to Netflix or other).

The heavy purchasers will have to decided if they are "heavy enough" to still warrant the speedy cheap shipping or not. It still might be cost effective. Just not as great a deal as it was.
 
Pretty much any price hike and I'll end up dropping the service. I'm already at about break-even with the current cost, so it wouldn't make sense anymore after that.
 
They're going to end up raising the price by around $5-10 and everyone is going to rejoice that the hike was so small and how great Amazon in. Amazon will then laugh it up all the way to the bank as people are happy about a price hike because they scared everyone with a massive potential hike.
 
I'm a heavy user of Prime shipping so $119 won't break the bank, but that's about my limit.
 
Have to agree with demingo here. They will raise it most likely by $10 and everyone who is a member will continue because it's not as massive as a $40 hike. Bottom line is they will raise it little by little over a couple of years to hit that $40 price hike. There is no way they could immediately raise it $40. They would lose too many members.

We are all essentially frogs being thrown into water, drop us in already boiling water and we will jump out, but most people are happy to sit there in the water and boil to death if it comes up gradually. Just like our privacy and rights.
 
yeah demingo is right. i never got prime even though i use amazon a lot. i just pick stuff with free shipping and wait til i get to $35. dont care about instant video at all.
 
They're going to end up raising the price by around $5-10 and everyone is going to rejoice that the hike was so small and how great Amazon in. Amazon will then laugh it up all the way to the bank as people are happy about a price hike because they scared everyone with a massive potential hike.
Yup, this is one of the oldest tricks in the book. Heck, I just used that two weeks ago. I wanted ten drives for my team, so submitted a request with the business reason for twenty. Sure enough as expected upper management grumbled and said we could only have ten, but I know I would have only gotten five had I requested ten lol! There has to be a name for that bit of basic psychology.

BTW, the other trick they can do is raise the price up by 50%, but then say four or five times a year have a blowout sale at 50% off, where people will feel like they are getting $120 worth of service for $60 and line up around the block to buy Prime.

Amazon sadly knows how dumb the average person is, and the dummies have only themselves to blame.
 
Since they were forced to start collecting sales taxes in MA my purchases from amazon have gone way down. I used to order almost exclusively through Amazon but have moved on to other online retailers who don't collect it.

Recently I have noticed they have been shipping through USPS and my Prime packages have been taking an extra day to get delivered on a couple orders.

Iv'e been thinking about dropping Prime even before the rumored price hike. Any increase will seal the deal.
 
If they greatly improve their streaming video library I don't think $119 a year is ridiculous if you order and use Prime Shipping a handful of times a month. I buy a lot of stuff for work and at home via Amazon, so even without the video subscription I get my money out of Prime. If they were able to get new movies to stream 6-8 weeks after the DVDs drop I could stomach a $40 price hike.

It is nice that they polled their customers and didn't do what Netflix did a few years ago and basically tell their customers to take the price hikes, choose physical DVDs or streaming, and enjoy it. Of course Netflix modified things a bit after their stock price tanked and customers began cancelling.
 
They're going to end up raising the price by around $5-10 and everyone is going to rejoice that the hike was so small and how great Amazon in. Amazon will then laugh it up all the way to the bank as people are happy about a price hike because they scared everyone with a massive potential hike.

Yep, that's the good old "Door in the Face" technique.
 
I'd still renew at $100, possibly $120 but I'd be fairly pissed at that. The 2 day shipping on everything is well worth it to me. If they increase the price I'd like to see them lower the price on items like laundry detergent and similar use items so it would be possible to avoid going into stores like Walmart completely. As it is, even with prime, items like that are way too expensive on amazon to buy from them.

Also expand the streaming library to better compete with Netflix.
 
Primary story version:

  • Amazon realizes its expensive to offer free shipping / more people are signing up than makes it profitable for them
  • Amazon says "we must raise price of prime, sorry"
  • People uproar; complain; blog; twitter... #FreeAmazonPlug
  • Amazon is receptive to customers and keeps current price of Prime





Alternate, equally as plausible story version
  • Some marketing dickweed brainstorms a way to get more people to sign up for Prime
  • Price inflation = scarcity = ++demand; even dickweeds know this
  • Amazon broadcasts: "We must up price of prime" because of X
  • People renew/sign up to prime while still at current low low price, before the hike (I did)
  • People still complain about it; facebook, blog, twitter #Amazon Amazon Amazon
  • Organic user discussion about a brand is created (+$$$$$$$$$$$$$$)
  • Amazon never intends to raise price
  • Amazon says "were listening to you"... we love you, customer
  • Amazon: "OK customer, we value you so much, were leaving prime at current price!! horray!!"




No matter which story is the real one, Amazon walks away with;
  • customer feels like they got what they wanted
  • shitloads of brand buzz created
  • shitloads of people sign up to prime
  • shitloads of products sold
  • their news, name and discussion on the frontpage of [H], among many other but less important sites
 
well... I mean last year when we moved amazon sent my my new Weber BBQ grill (thing weighted a ton...well a lot) for free and in two days...

might almost be worth the $120 my car was too small and the stores around here wanted $70~ish to deliverer the grill.

we ordered stuff from amazon probably 4 or 5 times a month probably worth it ...but I won't be happy about it... and if anyone else can step in a capitalize on the opportunity I'd be more than happy to look for alternatives.

So then if they do this in the short term I will probably still be their customer, but I will be an unhappy customer looking to jump to the first other ship that comes by.
 
They're going to end up raising the price by around $5-10 and everyone is going to rejoice that the hike was so small and how great Amazon in. Amazon will then laugh it up all the way to the bank as people are happy about a price hike because they scared everyone with a massive potential hike.

This is definately the truth. They just watch the big Oil and gas companies do it so now everyone will follow the same path.
 
They should just raise the price by $10 already, these games where they talk of $20-$40 increases is just making management look silly. Prime is handy but their streaming service is years behind Netflix in both UI polish and library size.
 
They should just tier their Prime service. Keep the price the same for the shipping only and make just the streaming more.

Shipping
Shipping + Streaming
Shipping + Cloud?
Shipping + Streaming + Cloud?
 
Amazon increased the super savings free shipping minimum from $25 to $35 a few months ago. I am not surprised that the Prime service is going to have a price increase as well.

Amazon is still a good deal for people who don't have to pay sales tax.
 
I had a trial of Prime. I decided to test it out by ordering some exercise equipment (a relatively difficult thing to ship quickly). It came completely destroyed, almost intentionally so. No Prime for me. :)

(for clarification, I order half a dozen things a month or more in never in all the years have I had any issues until I had Prime...go figure)
 
I had a trial of Prime. I decided to test it out by ordering some exercise equipment (a relatively difficult thing to ship quickly). It came completely destroyed, almost intentionally so. No Prime for me. :)

(for clarification, I order half a dozen things a month or more in never in all the years have I had any issues until I had Prime...go figure)

Had you been ordering exercise equipment before?
 
You have to be pooping me. I wasn't really able to justify the cost as it is (and was even willing to tolerate the price hike on the minimum free shipping).

I can't imagine Amazon needs the money, they should slow their roll.
 
Amazon increased the super savings free shipping minimum from $25 to $35 a few months ago. I am not surprised that the Prime service is going to have a price increase as well.

Amazon is still a good deal for people who don't have to pay sales tax.

You mean people that defer sales tax until they pay it on their taxes? :p
 
I've got it solely for the shipping (I've never even used the video service). I certainly wouldn't renew with a 50% hike. It might still save me money even at that rate, but its the principle of the thing.

That said, I agree that this is probably just them:

1) Raising the a worst-case specter so we'll be happy with a moderate increase
2) Floating an idea to see what exactly they can count on getting away with,
or
3) Cheap publicity-whoring combined with a start-a-fire-then-put-it-out scheme to look like a company which is responsive to its members

The thing with the "frog in the increasingly hot water" analogy is that, if it hits a $40 increase over several years, given inflation that'll be much less of an increase value-wise (and thus a whole lot more palatable). That would be a different kettle of fish, and one I could live with. There's precious little that I can buy that costs the same as it did five years ago. Hell, given the Post Office's current dilemmas, a stamp will cost $40 in a couple of years :p Such a hike overnight? No thank you.

I'll join the ranks of those who'd be very surprised if they went through with this as advertised. And after said surprise, I'd join the ranks of "ex-Prime members" :)

-Tuthmose
 
if it goes to $119.00 I absolutely will not renew....

At 119 I will still renew. The free 2nd day shipping alone is worth it for me. 1 or two large tools and the 119 becomes a moot point. Everything after that is just gravy.
 
Funny thing about Amazon: they are expanding their number of fulfillment centers worldwide, taking market share from both online and B&M businesses, and their stock price is flying high...Yet they are not currently profitable.

Wait, What!?! Amazon is not profitable?

Yep, Amazon posted a loss. Sure they have plenty of cash and market share and can sustain their business model, but some bean counter somewhere is concerned that they are not actually making a profit. The business media is also trying to figure out how a "not profitable" business has a raising stock price.

Perhaps this "prime" price hike is a "test of the waters" to see if Amazon is now in the position to start "milking" their online "monopoly".

I also agree with the previous posts stating Amazon "wants" a $40 increase, but will "gruelingly" only raise prime $10 because Amazon has "listened to their customers".

You don't manage a corporation to not make a profit. The "milking" of their customers is going to happen. When and how is yet to be determined.
 
What they should do is just split the prime shipping and all the other stuff into different packages. I only care for the 2 day shipping. I never use any of the other stuff. If the price increases beyond $20 Ill drop prime and simply start buying at local B&M's.
 
My prime subscription has been running strong for about four years now, and since I am currently a grad student my annual fee is still a mere $40. While I am glad that I get all the nice benefits of prime at a lower price, I am now concerned that student subscriptions will also get a price hike.
 
right now they have to be losing a good amount of the shipping cost for the users. so even if they do just raise it a fraction of what they want, they are still just helping toward breaking even on that service.
 
what's up with all these price increases lately?...free shipping upped to $35, now Prime membership, sales tax in more and more states...the 'value' of shopping with Amazon is getting less and less everyday...Amazon is making stores like Best Buy, Walmart etc look good and if the prices are almost the same then the choice becomes less clear
 
What they should do is just split the prime shipping and all the other stuff into different packages. I only care for the 2 day shipping. I never use any of the other stuff. If the price increases beyond $20 Ill drop prime and simply start buying at local B&M's.

Sounds reasonable but I don't think this will happen for the same reason Cable TV doesn't have "a-la-carte" pricing.
 
what's up with all these price increases lately?...free shipping upped to $35, now Prime membership, sales tax in more and more states...the 'value' of shopping with Amazon is getting less and less everyday...Amazon is making stores like Best Buy, Walmart etc look good and if the prices are almost the same then the choice becomes less clear

Well, the tax thing at least is not of their making - blame your legislators on that one. Of course, we were all paying the required sales tax at the end of the year anyway, right? ;) I guess they just wanted to collect it earlier . . .

As for the rest, as kindasmart pointed out, they're losing money as it is. At some point even Amazon's mystical powers will fail and they'll have to show a profit. Gas prices are high, and even with the no-doubt awe-inspiring low rates their volume allows them to get (extort?) from the major carriers, they've gotta be losing scads of cash Prime's fast shipping.

I think it also depends upon where you live if Amazon is worth it (now, or at increased pricepoints). I live a minimum of 45 minutes from any competitor except Wally-world, and even that's 20 minutes away at highway speeds. The nearest decent computer store is the Microcenter well over an hour from here. Gas being what it is, Amazon with Prime shipping saves money. I guess if you lived in suburbia and could walk to a B&M store, that equation changes. Some folks in the center of the country live in places that make where I am look like the inner city, so Amazon must save them a ton of cash. Prime is probably worth it for them even at $200 a year just in gas saving alone.

-Tuthmose
 
Now if Amazon does actually work with the FAA and gets my small orders shipped same day with quad-copters, then I actually would pay as much as say $150 just for the cool factor! xD
 
I'm already having a hard time justifying the $80. So much so that I haven't. If the Kindle book checkout was once a week not once a month then maybe.
 
Back
Top