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Monday, March 27, 2023

Amazon Prime Price Increase: Here’s Why It’s Still Worth It

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The cost of Amazon Prime just went up. But for many of us, the perks are likely still worth it.

Amazon.com Inc.

AMZN 13.54%

said Thursday that it’s raising the price of its popular delivery and digital-media service to $139 a year from $119 due to “continued expansion of Prime-member benefits” and higher costs for wages and transportation. Customers paying monthly will now pay $2 more at $14.99 a month.

The increase might frustrate some, especially while inflation is making many things more expensive. This is the third time Amazon has upped the cost of Prime subscriptions—most recently in 2018, when the e-commerce giant raised it from $99.

While a 17% price jump is notable, Amazon has expanded its catalog of free music, videos, games and books over the years. It has also increased the number of items available for one-day and even same-day delivery. Prime remains a bargain, if you use the services often enough.

“The level of service they provide is a lot higher than four years ago, and they are aligning Prime fees to reflect that higher value,” said

Colin Sebastian,

an analyst covering Amazon at investment bank Baird.

Here’s a closer look at what that value is and how alternatives stack up in Prime’s biggest areas of competition: online shopping and streaming video.

Shipping and delivery

Many of us probably signed up for Amazon Prime for the shipping. Prime includes one-day delivery on more than 10 million items and two-day shipping on millions of others with no minimum purchase. In some areas, you can get same-day delivery on goods, or two-hour grocery delivery, at no extra cost.

Amazon’s shipping isn’t without its issues. People in more remote areas likely won’t receive their packages in two days, and Amazon has had delivery delays during the pandemic, even for people in the center of major cities. But the company’s overall consistency and scale is unrivaled.

Without Prime, shipping can be free or discounted on orders costing more than $25. Anything below that, you’ll pay shipping fees, which can vary depending on an item’s weight and your preferred shipping speed. And there’s no one-day shipping option.

If you shop impulsively rather than bundle items in your cart, the price of Amazon’s Prime membership can pay for itself in a week.

My editor and I would have racked up $120.80 in shipping fees for our past weeks’ worth of delivered goods, which included face masks, paper towels, laundry detergent and other items, if we had ordered them individually without a Prime membership. If we’d planned better and bundled the items together, shipping without Prime still would have set us back an extra $27.26. 

Amazon Prime includes one-day delivery on more than 10 million items and two-day shipping on millions of others with no minimum purchase.



Consider Amazon’s closest retail competitor,

Walmart Inc.

It offers next-day and two-day shipping to Walmart+ subscribers with no minimum purchase required. And you can get groceries and other items delivered from its stores as quickly as that same day. Walmart+ also provides discounted gas and other perks.

Cost-wise, Walmart+ is cheaper, at $12.95 a month or $98 for the year.

But Amazon gives you more. Along with shipping, it also provides free unlimited cloud storage for photos and 5GB of storage for video. There’s a Prime ebook library and music collection. Most important, Amazon Prime offers free on-demand video streaming.

Streaming services

Amazon Prime Video is included in a Prime membership (though you can sidestep the delivery business and pay $8.99 a month solely for the ad-free streaming service).

Prime Video competes closely with

Netflix Inc.

and Hulu in the streaming wars, with all three investing heavily in original content. You might prefer Netflix’s selection or have laser focus on some of Hulu’s choicest content, but Amazon Prime remains a bargain on price.


Are you an Amazon Prime customer? If so, has its rate increase caused you to re-evaluate your subscription? Why or why not? Join the conversation below.

At its new rate, Prime costs more than Netflix’s $9.99 monthly basic plan, but the latter only lets you watch on one screen at a time, and the content isn’t HD. If you upgrade to Netflix’s standard or premium plans—to stream in higher resolution on more screens—you’ll pay $15.49 or $19.99 a month, respectively. Both total more than the full Amazon Prime package membership.

Hulu’s annual plan starts at $69.99 a year, but if you don’t want to see ads, it’ll run you $155.88.

“If a consumer is starting anew and looking at the price, there may be cheaper options,” said

Christina Boni,

a retail analyst at the financial-services firm Moody’s. “But given all the bundling provided by Amazon, you might not want to give that up.”

—For more WSJ Technology analysis, reviews, advice and headlines, sign up for our weekly newsletter.

Write to Dalvin Brown at dalvin.brown@wsj.com

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