The news: In his annual shareholders letter, Amazon CEO Jeff Bezos said that the company has surpassed 200 million Prime members around the world. It’s the latest update since January 2020, when Amazon hit the 150 million milestone. Amazon reached 100 million Prime members in April 2018.
Why it matters: The membership program, which costs $119/year or $12.99/month in the U.S., is a crucial part of Amazon’s business. A key Prime benefit is free shipping, among other perks such as streaming media; cloud storage; grocery delivery; discounts at Whole Foods; and more.
Amazon has invested heavily in its logistics network to make one-day delivery the standard for free Prime delivery. During Q4, Amazon spent $21.4 billion on shipping, up 67%. The company grew its fulfillment center footprint by 50% in 2020.
By the numbers: Subscription services revenue, which includes Prime memberships, came in at $7 billion during the fourth quarter, up 34%. Prime membership sign-ups spiked during the holiday quarter, according to a recent report from CIRP.
Amazon doesn’t disclose the total amount it collects in Prime membership fees. But at the standard Prime subscription rate of $119/year, annual revenue from the program would translate into revenue of $23.8 billion, though the company offers discounted memberships for students and others.
