Amazon Prime is about to get more expensive in the US
Amazon has published its fourth-quarter earnings report for the period that ended on December 31, 2021, revealing, among other things, that it plans to increase its Amazon Prime membership price in the US. The subscriptions will increase from $12.99 per month to $14.99 per month for monthly memberships, and from $119 per year to $139 per year for yearly memberships. According to Amazon, this is the first time Prime membership rates have gone up since 2018.
While the yearly plan will continue to offer a slightly better rate over the monthly option, the difference in annual cost increases between the two is only about $4, with a year of monthly payments rising by $24 while the yearly plan is up by $20. That being said, the overall difference in cost between the two plans does add up as you still stand to save about $40 with a yearly subscription versus paying for 12 months separately.
These pricing changes will be going into effect for all new Amazon Prime members on February 18, 2022. Current Prime members have a slightly longer grace period, with the new rates ticking over for renewals after March 25, 2022 — if your subscription is up before then, you might still have a chance to lock in the current price for a little while longer.
Why is this happening?
Amazon cites its continued investments in Prime, expanding membership benefits, rising wages, and transportation costs as the primary factors for the increase. The company goes on to point out a large increase in the number of original shows and films for Prime Video, including the upcoming "Lord of the Rings: The Rings of Power" series. And, of course, there are other Prime Originals like "The Wheel of Time" and "Coming 2 America" that have already seen a release since the expansion began in 2018.
An increase in the number of items that offer free Prime shipping is also mentioned, with Amazon stating Free Same-Day Shipping has also since been expanded from 48 metropolitan areas to 90. Beyond that, Amazon points toward relatively new programs it has introduced like Amazon Pharmacy, as well as its expansion of older existing offerings like Amazon Music and Prime Gaming. This is despite Amazon's reported 9.4% sales growth ($137.4 billion) in Q4 of 2021.
NOTE: This article previously suggested Blue Origin was a part of Amazon. While Jeff Bezos, founder and executive chairman of Amazon, is also the founder or Blue Origin, they are indeed separate entities.
Expansions outside of Prime have also accrued additional expenses, with Amazon's first physical clothing store, Amazon Style, set to open later in 2022. In addition, the first Starbucks Pickup with Amazon Go opened in New York in November of 2021. In essence, Amazon has to spread its profits across more areas and plans to recoup some of those costs via its Prime memberships.