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Cost of Amazon Prime to rise.

2014 Feb 11th 13:03 PM

The cost of Amazon`s Prime shipping is about to go up. This was the information that came from Amazon executives last week who said that shipping costs would make them increase the price of the company`s popular delivery membership. Currently Amazon Prime is £49.00 a year but the cost could potentially go up by £12 to £24 pounds which would be quite a steep increase.

Amazon Prime began in 2005 as a premium option to "Super Saver Shipping" which until a few months ago was offered free for any purchase but this was altered to a minimum order of £10.00. This allowed Super Saver delivery to boost sales in two ways; customers would buy more than they at first planned to meet the free shipping mark and cutting shipping from the final price of the order eliminated one of the reasons people still prefer shopping in actual stores.

Prime is £49 for a year`s membership, the benefits that members receive is a limitless Free One-Day delivery  and access to the Amazon Kindle library. Members appreciate the speed and reliability of the service and some say that it encourages consumers to spend more as they want to maximise the benefits of the membership . Amazon has never revealed how many people are members of the Prime service other than a general "tens of millions". However the company did claim that they had more than one million new Prime sign-ups during the third week of December alone.

Researchers estimate that Prime members spend almost as much as twice as much on Amazon per year as non Prime members do. This in turn feeds Amazon`s "virtuous cycle".  "When customers spent more, Amazon`s volumes increased, so it could lower shipping costs and negotiate new deals with vendors." Stone writes. "That saved the company money, which would help pay for Prime and lead back to lower prices."

This rise in price may not bother devoted Prime members who have had the service for a number of years. It is unlikely that customers who are now used to the free one day shipping will be bothered about an increase if they buy frequently on Amazon. However new Prime users may be more disgruntled and not bother to renew their membership as they have yet to become accustomed to the service.

 



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