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Amazon's 25% Prime Price Increase Looks Smart
From the Buzz & Banter: Investors are cheering the company's decision.
Michael Comeau    

Amazon.com (NASDAQ:AMZN) announced it is raising the price of its Prime service to $99 from $79.

This follows pricing changes in the UK and Germany that raised prices for some Prime users, and discussions on its last eanings call (subscription required to read links) that the Prime price could go up by $20-40.

Amazon is passing along more fuel and shipping costs to its Prime shoppers, and a 25% hike after nine years of being in service seems pretty reasonable. Many people are forgetting that Prime includes access to Amazon's video streaming service, which competes with Netflix (NASDAQ:NFLX), and video-on-demand offerings from the likes of Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC).

I would assume that Amazon hasn't seen much resistance in the UK and Germany, or much worry from domestic customers stemming from past hints of price hikes.

Late last year, research firm CIRP said Prime shoppers spend $1,340 annually, while non-Prime customers spend $650.

If someone's spending that much money on Amazon, it's probably somewhat integral to their lifestyle and they'll still be saving on shipping, so $20 likely won't be a big deal.

As for the people for whom the extra $20 is an issue, they probably weren't spending all that much anyway.

I'm an Amazon Prime customer and quite happy with the service, so I'll probably stick around. In fact, I might actually have to start spending more to make the $99 worth it.

Now excuse me while I order a 10-pack of deodorant, a case of granola bars, and a backup pirate flag.

Yes, I used Prime to order a pirate flag:



Thus far, Amazon shares are reacting positively, ticking up $9 in pre-market trading.

Also note, if you're not yet an Amazon customer, you can sign up within the next seven days and lock in the old price of $79.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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Position in TWC
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Amazon's 25% Prime Price Increase Looks Smart
From the Buzz & Banter: Investors are cheering the company's decision.
Michael Comeau    

Amazon.com (NASDAQ:AMZN) announced it is raising the price of its Prime service to $99 from $79.

This follows pricing changes in the UK and Germany that raised prices for some Prime users, and discussions on its last eanings call (subscription required to read links) that the Prime price could go up by $20-40.

Amazon is passing along more fuel and shipping costs to its Prime shoppers, and a 25% hike after nine years of being in service seems pretty reasonable. Many people are forgetting that Prime includes access to Amazon's video streaming service, which competes with Netflix (NASDAQ:NFLX), and video-on-demand offerings from the likes of Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC).

I would assume that Amazon hasn't seen much resistance in the UK and Germany, or much worry from domestic customers stemming from past hints of price hikes.

Late last year, research firm CIRP said Prime shoppers spend $1,340 annually, while non-Prime customers spend $650.

If someone's spending that much money on Amazon, it's probably somewhat integral to their lifestyle and they'll still be saving on shipping, so $20 likely won't be a big deal.

As for the people for whom the extra $20 is an issue, they probably weren't spending all that much anyway.

I'm an Amazon Prime customer and quite happy with the service, so I'll probably stick around. In fact, I might actually have to start spending more to make the $99 worth it.

Now excuse me while I order a 10-pack of deodorant, a case of granola bars, and a backup pirate flag.

Yes, I used Prime to order a pirate flag:



Thus far, Amazon shares are reacting positively, ticking up $9 in pre-market trading.

Also note, if you're not yet an Amazon customer, you can sign up within the next seven days and lock in the old price of $79.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
Position in TWC
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
More From Michael Comeau
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Amazon's 25% Prime Price Increase Looks Smart
From the Buzz & Banter: Investors are cheering the company's decision.
Michael Comeau    

Amazon.com (NASDAQ:AMZN) announced it is raising the price of its Prime service to $99 from $79.

This follows pricing changes in the UK and Germany that raised prices for some Prime users, and discussions on its last eanings call (subscription required to read links) that the Prime price could go up by $20-40.

Amazon is passing along more fuel and shipping costs to its Prime shoppers, and a 25% hike after nine years of being in service seems pretty reasonable. Many people are forgetting that Prime includes access to Amazon's video streaming service, which competes with Netflix (NASDAQ:NFLX), and video-on-demand offerings from the likes of Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC).

I would assume that Amazon hasn't seen much resistance in the UK and Germany, or much worry from domestic customers stemming from past hints of price hikes.

Late last year, research firm CIRP said Prime shoppers spend $1,340 annually, while non-Prime customers spend $650.

If someone's spending that much money on Amazon, it's probably somewhat integral to their lifestyle and they'll still be saving on shipping, so $20 likely won't be a big deal.

As for the people for whom the extra $20 is an issue, they probably weren't spending all that much anyway.

I'm an Amazon Prime customer and quite happy with the service, so I'll probably stick around. In fact, I might actually have to start spending more to make the $99 worth it.

Now excuse me while I order a 10-pack of deodorant, a case of granola bars, and a backup pirate flag.

Yes, I used Prime to order a pirate flag:



Thus far, Amazon shares are reacting positively, ticking up $9 in pre-market trading.

Also note, if you're not yet an Amazon customer, you can sign up within the next seven days and lock in the old price of $79.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
Position in TWC
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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