Amazon is increasing the monthly price option for Prime from $10.99 to $12.99 as it continues to expand the reach and benefits of the popular fast-shipping program.
Amazon said the price increase does not affect the annual membership option, which will remain at $99. With the price increase, the monthly option will now equal slightly less than $156 for a year. Amazon has been investing heavily in Prime, bringing it to new markets and creating additional benefits and original content. Those moves, plus regular increases in fees from shipping partners, are among the factors contributing to the price increase.
Amazon says it has no preference on the annual versus monthly option. However, offering a monthly service with no contract or guarantee carries with it a cost to manage and volatility that isn’t present with the more dependable annual option.
The increase begins today for new members, and existing monthly Prime subscribers will see the cost jump after Feb. 18.
Prime membership for students, discounted at half the monthly cost after a six-month trial, rises to $6.49 under the new pricing structure. The standalone Prime Video subscription of $8.99 per month and a discounted program for people on government assistance will stay at current prices.
The introduction of a monthly Prime subscription and the standalone Prime Video option in April 2016 gave Amazon a comparable offering to streaming rival Netflix. Today’s move shows Amazon is still tinkering with the monthly option to find the right formula.
Amazon said Prime has grown from 20 million eligible items a few years ago to more than 100 million today. One-day and same-day delivery is now available in more than 8,000 markets.
Earlier this month, Amazon said it shipped 5 billion Prime items in 2017. To ship all those items and fill all those orders, Amazon upped its global footprint of distribution centers by 30 percent last year. In the U.S. alone, more than 6,000 trucks and 32 Amazon Air planes traversed the roads and skies, packed with Amazon packages.