Amazon Posts Massive Quarter, to Raise Prime Prices

Posted on February 3, 2022 by Paul Thurrott in Amazon with 38 Comments

Amazon announced today that it earned a net income of $14.3 billion on revenues of $137.4 billion in the fourth quarter of 2021. And to celebrate, it’s going to raise the price of its Amazon Prime subscription in the U.S. to help offset shipping higher shipping costs and wages.

“A big thank you to employees across Amazon who overcame another quarter of COVID-related challenges and delivered for customers this holiday season,” Amazon CEO Andy Jassy said. “Given the extraordinary growth we saw in 2020 when customers predominantly stayed home, and the fact that we’ve continued to grow on top of that in 2021, our retail teammates have effectively operated in peak mode for almost two years. It’s been a tremendous effort, and I’m appreciative and proud of how hard our teams have worked to serve customers.

According to the firm, its AWS cloud services grew 40 percent year-over-year (YOY) and that business is now on a $71 billion annual run rate.

But it’s not all good news.

“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron,” Mr. Jassy explained. And it has some big entertainment properties coming on board this year, with The Lord of the Rings: The Rings of Power launching on Prime Video, while it becomes the exclusive home of Thursday Night Football as well. And those things aren’t going to pay for themselves.

And so Amazon is raising the price of Prime in the U.S. to $139 from $119 for annual plans and the monthly cost to $14.99 from $12.99. Amazon Prime has over 200 million members globally.

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Comments (38)

38 responses to “Amazon Posts Massive Quarter, to Raise Prime Prices”

  1. crunchyfrog

    Oh, the joys of inflation. It's like the 70's all over again.

    • lvthunder

      Yep. Just wish my paycheck would ride the inflation ride along with everything else, but that's unlikely.

    • bschnatt

      Hmm, you could almost say it's a... prime... example of inflation. Thank you, I'm here all night...

    • miamimauler

      @crunchyfrog


      As I understand it this is Amazon's first increase in the U.S since 2018.


      FFS guys, be reasonable. Given how other streaming services have raised their prices Amazon should be thanked for keeping the prices down over the past four years.


      Can we please have a little perspective instead of the usual knee jerk reactions.

      • wright_is

        As nobody actually mentioned the price hike, just the current inflation problems, it would seem your answer is misplaced...

        • miamimauler

          @wright_is


          Are you responding to me? If so, please make that clear as this amateurish comment and notification system doesn't tell me.


          So, are you talking to me?

          • wright_is

            Yes, I was talking to you, miamimauler.


            Crunchyfrog said mentioned inflation and it being like the 70s again, and you ignored his topic (inflation and a repeat of the 70s) and went on about defending the Amazon price rise, which he never even mentioned.


            I believe he was talking more about the steep rises in fuel and electricity (50% on fuel in the last 6 months, between 30-40% on electricity, here in Germany) and the price rises on food and other staples.

  2. bschnatt

    I haven't seen the Wheel of Time yet, but I've read the first 3 books, and based on reviews, what Amazon is putting up there *isn't* anything like what I read. If they use that kind of writing team for the new Lord of the Rings series, I'm outta there. 5 year old movies, badly written new series, an occasional vitamin order and free Kindle books I don't have time to read? Yeah, that's not looking too good to me...

    • simont

      Movies/TV Series are sadly generally not to close to the books. The first few Harry Potter films were the exception

      • bbennett40

        100% There's no way they could present that series as written in a show. IMHO It would be one long slog and most people would not put up with that. That being said, I do think the show rushes a bit. ::shrug:: I enjoyed the books and I'm enjoying the show.

  3. red.radar

    I canceled prime when they started emphasizing video content more than good shipping terms.


    I liked the old days when you could pay an upgrade to get something overnight it was great for car parts and other time sensitive items

    • wright_is

      Prime, here, is usually next day anyway. Although, due to the increases in home deliveries over the last 2 years, that is now often 2 days, if you don't order before lunchtime.


      3rd party sellers are also more often on 2 day delivery, instead of next day, with Prime - without Prime, it is often 4-5 days.

  4. LT1 Z51

    When it went from $99 to $119 (in 2018), it was justified for the things I bought. I buy less now. I do enjoy Grand Tour, Clarkson's Farm, and the Boys so maybe I'll stick on for $139. But this isn't a "no-brainer" anymore like it was. A $40 increase over the past 4 years is a bit steep.

    • lvthunder

      Have you seen the increase in freight shipping prices though? It's no joke and I bet hit companies like Amazon and Walmart really hard.

      • LT1 Z51

        Those prices will go back down when the supply/demand equation levels out. The thing about subscriptions, they NEVER go back down. Even if costs do. But as others have said, the shipping actually has gotten slower, so if the price goes up, one should expect the level of service they got in 2017.

  5. rbwatson0

    Two day deliver here in the states is more like a week. It takes Amazon so long to ship stuff now and delivery for me is more like 3 days.

  6. arjay

    Maybe if I drop Prime, I'll make fewer impulse purchases late at night. Probably better overall.

  7. minke

    Amazon Prime is not worth it for me--I don't order enough stuff online, and I usually can get free shipping anyway though maybe not as fast. Where I live there is no overnight anything, so that part of Amazon is useless to me anyway. It might make sense if I wanted to use their free unlimited photo uploads, but how long before they limit that or start charging for it? To people living in a big metro where they can get all sorts of stuff delivered quickly I can see how it might be well worth it.

    • wright_is

      Yes, Prime only really pays for itself if you buy a lot from Amazon and use the Prime next day delivery service - although that is often 2 days recently, due to demand and a lack of drivers.


      I use a bunch of services, but I usually have to pay 10-15€ delivery on top, with Amazon Prime, the delivery costs are "zero", even if the products themselves aren't always the cheapest these days. But, by the time you include delivery and convenience, Amazon Prime usually works out cheaper.


      Compared to other services, I had recovered the cost of the Prime subscription within 3 months last year.


      Like every other subscription, it comes down to how often you use it, to whether it makes any sense or not.

  8. skinnyjm

    I'm not sure I'm going to be able to hang with $139/annually.

  9. blue77star

    We made ton of people thanks to dumb people...because they are so stupid we are going to even raise the price. You have to be stupid to pay any type of subscription for companies like this. All you do is making them rich.

    • miamimauler

      @blue77star


      "You have to be stupid to pay any type of subscription for companies like this"


      So, people are stupid for paying for a service they often use for product purchase and delivery and the many movies and tv series they offer?


      What about Netflix and other streaming service subscribers, are they also stupid for paying for a service they use and believe offers value for money?


      What about people who subscribe to websites such as Thurrott, are they stupid for subscribing to a service they see value in?


      Where do you personally draw the line? Do you subscribe to any service at all?

    • wright_is

      I had recovered the cost of the subscription after 3 months, last year. If I had paid for delivery / next day delivery on the orders, that would have easily exceeded the cost of the annual subscription...


      If you only make a couple of orders a year and hardly listen to their streaming music or watch their film and series offerings, yes, it is expensive. If you regularly purchase stuff from them, it works out good value for money and the music and video services are a free bonus.

    • bbennett40

      At $11.50/month or $5.75 each for video and shipping, it still seems like a rather good deal. IMHO

  10. Daekar

    It's interesting, the only thing that we use Prime for is the free shipping, and I watched The Wheel of Time. If they're raising the price to support more Prime Video productions I'm not terribly pleased. I feel like Prime has gotten worse over the last few years, not better. 2-day shipping is a memory from the past, and the TV content isn't sufficiently differentiated to make that much of a value add. They need to be careful they don't reach too far into the wallets of their long term subscribers.

    • wright_is

      I suspect a price hike in Europe will follow.


      I'm not sure what fuel prices are like in the US, but diesel prices have climbed about 50% per litre over the last 6 months, here in Germany, going from around 1.12€/litre (4.24€/US gallon) to 1.65€/litre (6.25€/US gallon) - that is from around $4.83 to $7.12 a gallon. That, plus wage increases mean that the delivery costs have skyrocketed and it will be hard to absorb a more than 50% increase in delivery costs.


      Luckily the delivery vehicles all run on diesel, petrol (gas) is about another 10c a litre more expensive.

      • wright_is

        I just looked up the US price per gallon, just under half of what we pay here!

        • LT1 Z51

          Most of that is taxes (European taxes are atrocious). Real difference is in the 10-20% range. We allow a slightly "dirtier" formulation (CA doesn't) but taxer on gas/petrol are basically non-existent (it's like 20 cents per gallon, or about 5.3 cents per liter)

          • LT1 Z51

            I did more digging. Example in Michigan where I live it's about 65 cents (per gallon, part of that tax is percentage based so it fluctuates). Germany is 65 Euro cents (per liter, so 1.15 x 3.78 = 4.35ish times higher or about $2.80 a gallon). Gas here is $3.35 about, so if I price it with European taxes it goes to $5.50 or a 65% increase!

          • wright_is

            "Real difference" is what you pay, not the price before tax... Taxes have to be paid regardless, so whether it is 10% or 110%, the price after tax is the only price that is relevant.

            • LT1 Z51

              Just making a point our gas is cheap not because it's actually "less" in terms of material cost. But rather it's taxes. Which also makes me question why Amazon raises prices. Fuel costs are not that much higher than they where 10 years ago (in terms of raw value) so the increase even to blame on inflation isn't correct. It's just greed.

              • wright_is

                The average price in the USA has risen from $2.17 a gallon in 2020 to over $3 a gallon in 2021- that is the annual average, most of the steep price increases were in the last quarter or so, the current average is $3.72, so a whole dollar more than 2018 and $1.72 more than 2020 (there was a dip between 2018 and 2020, so the price differential since the last Prime price change is "only" 30c a gallon).


                Given how many gallons of fuel are burnt delivering the products, that is not an insignificant rise in costs.


                Moving to electric, especially in urban areas, would save costs in the long run (Die Post/DHL in Germany is investing heavily in a fleet of electric vehicles for urban and suburban deliveries, for example), but the initial costs are high, because the vehicles are made in small number, to their design, instead of just buying standard Mercedes Sprinter or VW Caddy/Bully models, plus the installation of the recharging infrastructure (I don't know what vehicles the delivery companies use in the USA, so I can't comment there, directly, but I assume they are ordering a lot of standard delivery vans, whether they be Transit/Sprinter class or larger panel trucks).


                Regarding @Daekar's original comment, calculate the tussles with labour regulators and the wage increases recently and the increase in the cost of Prime seems well justified.


                (Again, Amazon has to pay the same tax as you and I at the pump, so "raw" prices, without tax are irrelevant.)

                • LT1 Z51

                  What I'm getting at is compare them to 2008 and 2009 gas prices. The raw value (as in not inflation adjusted) but with taxes is identical. Gas was REALLY expensive in the US for about 4 years in 2008-2012. The prices now are lower or equal to those.


                  Does Amazon move more miles now than in 2009, I cannot say, but a $40 price increase is clearly not justified.

      • navarac

        In the UK, Petrol 141 pence/litre, diesel a little higher. Amazon Prime is next day delivery here, but then, of course, there is less distance to travel !

        • JerryH

          Next day! Wow. In the US I get same day once in a while as a special offer, next day again once in a while as a special offer, but most of the time it is their standard 2 day prime. Which often for me anyway ends up being three or four day prime with an apology note about them "running late". That never used to happen, but it seems like about 10% of our packages get delayed these days and don't make it in 2 days.

        • wright_is

          It is generally next-day here in Germany too. But due to the amount being ordered online (in general) and the lack of drivers, that is often being stretched to 2 days, or you have to order early - you used to be able to order up until about 18:00 to guarantee next day delivery, now, some products have to be ordered before lunch.

  11. Saarek

    I wish they offered the old system of Amazon Prime Delivery decoupled from the streaming side. I rarely watch anything on Prime video, but have Amazon deliveries every week.

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