Date: Thursday, March 20th, 2014, 09:50
Category: Amazon, Business, News, retail
Back in February, we wrote about rumors that Amazon might be raising the cost of its Prime service as much as $40. Amazon decided to split the difference rather than alienate all its customers by only raising the price by $20, but it seems that was enough to rile up a lot of Amazon Prime customers into threatening to stop paying for the service. An email was recently sent to current subscribers to notify them of the change which included an explanation for the price increase;
“Even as fuel and transportation costs have increased, the price of Prime has remained the same for nine years. Since 2005, the number of items eligible for unlimited free Two-Day Shipping has grown from one million to over 20 million. We also added unlimited access to over 40,000 movies and TV episodes with Prime Instant Video and a selection of over 500,000 books to borrow from the Kindle Owners’ Lending Library.”
Starting on April 17th, the new pricing will be in effect for existing customers on their next renewal. One of the complaints from current users of the service is that they have no use for some of the Prime services. Many people claim to not use Prime Instant Video service, nor the Kindle Lending Library, and are asking why they should pay for it. Were Amazon to split off the streaming service, one would guess that to stay competitive with the likes of Netflix and Hulu Plus, Amazon would have to keep the price below $10, splitting the additional cost in half, but would people still balk at $89 per year? Probably. It may turn out to be a good thing for some online retailers who hope to cash in on the fallout by getting the attention of the consumers dropping their Amazon Prime memberships. One such retailer is ShopRunner, a network of retailers from Neiman Marcus to PetSmart that offers two-day shipping, who has offered to waive its fees for Amazon Prime members for a year. ShopRunner usually costs $79.
Even if people don’t trade one subscription for another, perhaps it will give consumers a reason to look at other options instead of heading for Amazon by default. I had never heard of ShopRunner until now, and just took it for granted that Amazon was the best game on the internet. Now I’ll probably take a look at ShopRunner. Maybe it will be good for everyone to shop around a bit more…well, good for everyone except Amazon.