Amazon is raising the price of Prime in the US to $139 per year, compared to the $119 annual fee introduced four years ago. The price hike is intended to address the increased costs Amazon faces across the board, from shipping to labor to construction, analysts said.
The price change will take effect for new members on February 18th and for current members after March 25th. The price for a monthly subscription to Prime also goes up to $14.99 per month from $12.99 per month.
Amazon cited “the continued expansion of Prime member benefits and increases in wages and transportation costs” as the reason for raising the price of the service.
Higher costs led Amazon’s operating income to decline significantly in the last quarter of 2021, falling to $3.5 billion from $6.9 billion a year earlier, the company announced in a results release this afternoon. It’s the second quarter in a row that Amazon’s profits have fallen.
Amazon last increased the price of Prime in April 2018, citing higher shipping costs and other benefits. Before that, the price was increased to $99 per year in 2014, after having stayed at $79 per year for nearly a decade since its launch in 2005.
Prime passed 200 million subscribers last year. Amazon has continued to expand the service’s offerings from fast shipping to include access to Prime Video, music streaming, Twitch benefits and more.
Andy Jassy, Amazon CEO, said some of the cost increases the company faces are “short-term challenges” but will continue in the coming months. Amazon “saw increased costs due to labor shortages and inflationary pressures” over the holidays, Jassy said, “and these issues continued into the first quarter because of Omicron.”