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Amazon says they're raising prices because the Prime membership program is growing too rapidly.

Zee Krstic
April 26, 2018

Amazon announced on Thursday that the company is raising the prices of its Prime membership in the United States for the first time in four years. Starting on May 11, Amazon customers who are new to the Prime membership program will have to shell out $119 a year for free two-day shipping and Amazon's slew of other entertainment perks. Previously, Prime was just $99 a year, or a $8.25 per month. The last time that Amazon raised prices was in 2014, when customers paid just $79 a year.

According to Recode, Amazon's CEO Jeff Bezos shared that Prime memberships had surpassed more than 100 million subscriptions worldwide, and that Prime members account for more purchases on the site than any other shopper. 

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On the same call, Amazon CFO Brian Osavsky shared that the Prime program has become increasingly costly for Amazon—the sheer number of Prime-available products has soared from 20 million in 2014 to over 100 million products (and groceries) that customers can purchase today.

Amazon has made waves over the last year as they've acquired Whole Foods Market and expanded benefits to Prime members in stores nationwide. Earlier this week, Amazon extended its Prime Now delivery service to new cities beyond its initial test in Austin

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While the price increase could translate to frustrated customers—or potentially be a downside for those considering membership—Prime memberships could become even more valuable for savvy Whole Foods shoppers in the future. Just last week, Amazon and Whole Foods announced it would discontinue its current rewards program in the store and hinted at a new program where Prime members could have an exclusive 10 percent discount on already-discounted items.

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