Amazon is raising the price of Prime in the United States to $139 per year, up from $119 per year four years ago. According to analysts, the price increase is intended to address increasing costs Amazon is seeing across the board, from shipping to labor to construction.
New members will see a price increase on February 18th, and current members will see a price increase after March 25th. The cost of a monthly Prime subscription is also increasing, from $12.99 to $14.99 per month.
Amazon justified the price hike by citing “the continuous growth of Prime member perks as well as the rise in labor and transportation expenses.” For the time being, the price of Prime in other countries is not changing. Amazon said on a conference call with investors that it considers price in different countries every year and that it had no more announcements today.
Amazon’s operational income dropped significantly in the fourth quarter of 2021, falling to $3.5 billion from $6.9 billion a year earlier, according to an earnings statement issued this afternoon. Amazon’s profit has dropped for the second quarter in a row.
Amazon last increased the price of Prime in April 2018, claiming increased shipping and other perks as the reason. Prior to that, in 2014, the fee was hiked to $99 per year after being at $79 for over a decade since its inception in 2005.
Last year, Prime reached 200 million users. Amazon has continued to enhance the service’s capabilities, expanding from fast shipping to include Prime Video, music streaming, Twitch incentives, and more.
Some of Amazon’s cost increases are “short-term issues,” according to CEO Andy Jassy, but they will continue in the coming months. “Higher expenses were seen around the holidays due to labor supply problems and inflationary pressures,” Jassy added, “and these issues persisted into the first quarter due to Omicron.”