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45% of Amazon Prime users will drop it with the price rise

By Dan Wilson May 7, 2018 - 9:36 pm

According to a survey by Yahoo, 45% of Amazon Prime subscribers will ditch the service when the price goes up over the next few weeks in the USA.

Last week, we reported that Amazon will be raising the cost of Amazon Prime in the USA from $99 to $119: Amazon US to raise annual Prime subs by $20. The change will become effective on the 16th June, so if you are due to renew before then, you’ll enjoy the old $99 fee.

And that announcement came close on the tails of Amazon’s first quarter results and the company’s announcement that there are now 100 million prime subscribers around the world. There is no indication that a price rise will be coming any time soon to Amazon Prime users outside of the States.

According to the recent Yahoo Finance survey of almost 7000 existing Prime members, 45% said they will discontinue their membership once the price goes up to $119 a year. 20% said they were unsure. But for the remainder of those who are willing to pay more, the vast majority cite “fast and free delivery” as the top reason for staying.

Brian T. Olsavsky from Amazon.com said of the announcement last week that this was the first increase in fees for Amazon Prime since March 2014 and, in that time, the costs had risen and perks of Prime had dramatically increased. The Prime service is rather more generous in the USA with many more options and services available than in the UK and Europe.

And, with monthly options available, it is likely even if people do ditch Amazon Prime then they can also return at peak and interesting periods like Christmas and Black Friday should they wish.

As is well established, people will say one thing in a survey (often depending on how the questions are phrased) but then don’t follow through and actually do what they said they would. It seems unlikely to Tamebay that there will be a dramatic fall-off in numbers using it. Not least because it is annually renewed and $20 dollars isn’t likely to a big deal for the majority of subscribers who are more affluent than average americans.

  • 3 years ago

    HIGHLY doubt that! 🙂

    I’m sure that Amazon did extensive research to test the new pricing model and did focus groups and what not. They could lose some small % maybe, yes, but not 45%.

    • 3 years ago

      It’s a scaremongering survey – you ask people if they’ll cancel their accounts and they say yes. Most of them won’t even know their renewal date and the money will go from their account before they notice it. The rest will be addicted to Amazon and just renew as they’ll want to carry on using it. A few may cancel, but they will the one’s that don’t use Amazon very much anyway and Amazon’s interest is repeat sales, not just subscriptions.

  • james
    3 years ago

    I doubt it will be as high as 45%, but i reckon amazon will take a decent hit.

    Personally i’m surprised prime became such a success, i know the shipping landscape in america is different, but is it really worth that much to that many?

    do most people spend more than $10 a month (EVERY month) on postage, on amazon FBA items only, when there is actually a free postage alternative available?
    – the free postage says 5 days, it very rarely takes 5 days, in fact most of the times i select free delivery my stuff arrives 1-2 days later, the same time as if i’d paid £5 for the delivery, or £80 for prime.

    they “throw in extras” like film & music, but it’s not exactly good. i’m sorely disappointed with what you actually receive, it’s more like a “trial” for other amazon services, designed to get you to sign up to more monthly subscriptions, not something you actually paid good money for already.
    – Amazon admit that, Prime is all about the delivery, you pay for delivery, the “extras” are free. and to me they feel free.

    I’m sure there are people who genuinely do “need” $120 worth of express shipping every year, but i suspect the vast majority don’t, and will see this as a good time to stop deluding themselves about the kind of value they’re receiving from prime.

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