So the big news today is that Amazon has decided to increase the price of Amazon Prime from $79 per year to $99 per year. The new price goes into effect on March 20th, 2014.
This come just five months after Amazon raised the threshold for their Super Saver Shipping (or as I like to call it, Super Slow Shipping) from $25 to $35 per order.
The thing with Amazon Prime is that it’s a lot of smoke and mirrors. I don’t know how people keep falling for it. It’s not worth paying $79 per year, much less $99. And with all the hidden charges it costs a heck of a lot more than that. Granted the free ebook per month and streaming videos that also come with Amazon Prime are enticing, but the list of ebooks is limited and Netflix’s video selection blows Amazon’s out of the water.
My biggest problem with Amazon Prime is that Amazon claims that Prime members get “free” 2-day shipping on most orders shipped or fulfilled by Amazon. But that is a flat out lie. In many cases you are paying more for that so-called free 2-day shipping.
I gave Amazon Prime a trial run a few months ago for the second time in the past few years, and unlike most people I’m not buying into Amazon’s clever marketing tactics.
All you have to do is look at the price for items with Amazon Prime 2-day shipping. A lot of the time they cost more than the same exact item without Amazon Prime. You are paying for the extra shipping cost with an inflated price. And then you have to pay the extra $99 per year in subscription costs to boot.
Here are some random examples I found with a quick look on Amazon:
Beats Solo Headphones – If you use Amazon Prime these will cost $149.99. But if you chose to order them from NickTechShop from the list on the right, they cost $139 with $5.49 for shipping. Right there you are paying $4.51 for “free” shipping.
SanDisk Sansa Clip 8GB MP3 Player – Amazon’s free shipping price for this item is $56.04. The non-Amazon price is $54.20 with free shipping.
Kong Dog Toy – This item is eligible for free shipping through Amazon for $12.59. Or you could order it through a 3rd-party merchant also with free shipping for $12.03.
The bottom line is if you order those three items without using Amazon Prime or Super Saver Shipping you’ll save nearly $7. Amazon can call it “free” shipping all they want but that doesn’t make it true.
These are just a few random examples and the prices often don’t work out like this, but it goes to show that Amazon Prime isn’t all its cracked up to be. There are a number of items that you’ll end up paying more for to get that “free” 2 day shipping. In the end you are paying a lot more than just $99 per year for the subscription costs.
Simple: If you don’t like it, don’t pay for it. Lots of people like it and they pay for it. Big fucking deal.
How exactly am I paying “a lot more than just $99”?. I can still chose the cheaper options, when they are available. I don’t have to choose the Prime shipping. I pay my $99, and then I can choose fast relaiable shipping, with great customer service, or I can choose the other “free” shipping options. I’m still only paying $99. Basically the entire premise of your article, and the headline, are built on flawed logic.
Obviously Amazon is not trying to hide the fact that you can the items for less from some of their partners, but is it really the zero sum game you are making it out to be? The others might have free shipping, but is it free two day shipping? Sometimes I want to know I will get the item in 3-4 days, and not in two weeks. And of course you sometimes have to deal with retailers with less than perfect customer satisfaction ratings.
Thanks so much for this insight! I’ve been on the 30-day free trial this past month and wasn’t sure whether or not to continue; now I know I won’t.
Plus, with no dedicated Android app or support for Chromecast like with Netflix, the free videos are of limited value to me.
I object to the ‘free’ designation too, though your examples should have compared items that can be gotten with the cost of buying from a third party with One Day Shipping. Why One Day? Because it’s the closest match to Amazon’s Two Day offering. Sellers have 1-2 business days to get your item out the door, and then it should come the next business day after that. So you’ll get your item sometime in a 1-3 business day window. Expedited Shipping ranges from 1-6 business days after shipment depending on the seller’s settings, and you won’t know until you receive your tracking number. For folks who want or need an order to come on a particular day (me in many cases due to my weird schedule), Amazon’s two day shipping does have something to offer and may be worth the cost of Prime if one orders often enough (me again).
I’ve complained to Amazon about the ‘free’ claim before. I’m sure they’ll never change it though unless forced to by a court or government regulations. (I’d also like to see the word ‘Buy’ disappear for digital content one doesn’t really own, but that’s another matter.)
The Beats Solo Headphones from NickTechShop has a standard shipping speed of 4-14 business days. Even expedited shipping is 2-6 business days. Prime shipping guarantees 2 business days.
The Sandisk Clip if purchased from DEALAROMA is free standard shipping but if I want two day shipping the shipping and handling cost becomes a whopping $28 so my order then becomes $82.20.
Kong Dog Toy if purchased from Grooming-Pet-Supplies has free standard shipping but if I want expedited (1-3 business day shipping) then shipping and handling goes up to $14.95 for a total of $26.98.
Bottom line, if free 2-day shipping is important, then Prime is worth it. If all you care about is free shipping and you don’t mind if it can take several weeks for your item to arrive, then don’t go for Prime.
I also feel compelled to mention that every item I have ordered with Prime shipping has arrived in 2 business days or sometimes even by the next day. Items I have ordered from third party sellers have sometimes taken several days just to ship, so I don’t get the item for over a week.
Your analysis seems a bit simplistic in the sense that you are analyzing individual components of the Prime service without looking at the overall picture when the various components of the Prime service are aggregated together.
For example, you compare the video selection to Netflix which costs $7.99/month so it would come out a few dollars cheaper annually ($7.99/month x 12 months = $95.88) compared to a $99 annual Prime membership. However, last I checked, Netflix doesn’t offer an opportunity to borrow an eBook nor will it get you free 2-day shipping on items you purchased.
I agree, Prime isn’t for everyone. If all you care about is streaming video, then Prime isn’t worth it. If all you care about is free shipping and it doesn’t matter how long your items might take to arrive, then Prime isn’t worth it. But if you care for all of the above benefits (streaming video + eBook library + 2-day shipping) then I think it is worth it.
Your comparison of Netflix vs Amazon pricing would be meaningful if you happen to see any value of the Amazon Instant movie library. As Nathan mentioned, he doesn’t value it at all (nor i), and the gap in the pricing would be much wider than few dollars …
I seldom watch movies or use the free monthly loan. but I buy a LOT of Amazon stuff and like getting it right away. I just renewed my prime, and will pay closer attention over the next year. but I like the shipping in 2 days. I think it’s the 2-day shipping more than free shipping that makes it worth it for me. (I don’t have Netflix – old tv. watch mostly msnbc).
While i do not like this prime membership, i would never order something from a third party that is selling on amazon because of the fact that you need to deal with them if you happen to buy something problematic. Granted, 85% percent of the things i’ve purchased from Amazon are electronics, so that explains the fear to deal with somebody other than amazon. Another thing, in my experience, 60% of the things that i’ve bought from amazon were problematic/defective so amazon replaced them right away. My position is to not purchase any electronics from online only retailer. I do not buy things from amazon anymore, nor from newegg. I’m tired to deal with broken products. If best buy has it, then i’ll purchase it since i can return it locally.
I get the ‘free’ prime shipping thru my son’s Prime… That’s all I get, but it’s the returning ‘crappy stuff’ so easily that I like.
But I do believe you are quite correct about hidden costs and appreciate always your insights! 🙂
kathyo
You find a few examples where Amazon with Prime shipping isn’t that great of a deal and you think that proves something?
You need to apply a little more rigor than that. Reasoning like yours could “prove” that modern medicine is worthless (because people still get sick) and that drinking water is deadly (because some people choke on it).
There are plus and minus on the Prime. I ordered an AC inverter. It arrived DOA and I sent them an email on their site saying it didn’t work and I wanted to return the item. The next day UPS came and picked it up and I had my money back the following day… I was shocked by how fast Amazon’s response was.
If I had bought it at WalMart I’d have to travel 40 miles round trip and stand in line.
I would like to see more recent movies on Amazon… the selection is kinda lacking there.
Not to be an apologist for Amazon Prime, but another benefit I haven’t seen mentioned, is no minimum amount is required to receive the 2 day shipping. Many times I have been thrilled about not having to build an order to over $25, now $35, just to receive a 60ct. Lindt Lindor Dark Chocolate Truffles for $16 when that emergency arises! Great blog, though! It has been very helpful.
Your examples aren’t convincing me. I signed up for a “free trial” for 30 days and I love this service. And the email I got today said my rate doesn’t increase until 2015.
One thing you didn’t mention are the free returns on items you don’t like. During my trial I bought 2 pair of shoes and one bedspread that I ended up returning. All I had to do was pack them back up and drop them off at UPS! So it gives me more opportunity to try things out with no penalty. And I can order 1 item and still get the AP 2-day shipping benefit.
When I signed up I didn’t even know about the streaming stuff. But I will check it out.
One thing not mentioned in your article is the ever increasing use by Amazon of courier services such as Lasership, OnTrac and A1 to make deliveries (both prime and regular orders). Judging by the hundreds of pages of complaints on Amazon’s own Carrier Feedback Forum, these companies have non-existent customer service, regularly lose packages, falsify delivery and delivery attempts, miss delivery windows, and are very careless in the handling of the items. They also use poorly paid non bonded couriers.
Also, Amazon has started to send many prime deliveries via Fedex SmartPost, which is where FedEx delivers the package to the post office, which then delivers to the customer, resulting in a much longer than 2 day wait.
For those not affected by this, Prime is still a wonderful deal delivery wise (although I tend to agree it is a bit shaky numbers wise). But for a growing number of customers, Prime’s two day shipping/delivery does not exist.
Amazon’s response to these customers has been to replace the item (often with the same service!) and to insist they cannot offer a choice of delivery company. This rings rather hollow.
I do usually check and compare the prices of non-Prime options vs the Prime ones. However, if it is pretty close I’ll opt for Prime b/c Amazon’s customer service has always been great for me. I’m also happy with the video streaming – I have Netflix too but there are many things AMZ has that NF does not. (and vice versa of course).
I like that I don’t have to try and reach $35 to have “free” shipping even if there is a buck or two built into that price. Still less than the standard shipping price for one item from Amazon itself, and it means I don’t pad my order with things I don’t really need (but want!).
My current Prime sub. doesn’t expire until Nov so I’ll have to see if the new price is worth it then.
Two people from Washington state are suing Amazon based on the same reasoning as yours, Nathan.
http://www.consumeraffairs.com/news/lawsuit-alleges-amazon-charges-prime-members-for-free-shipping-031414.html
(ABC has the story, but a video ad and irrelevant video play when while you read.)
I don’t subscribe to Prime but everything I’ve bought usually arrives in just a few days. And any returns I’ve needed didn’t even take that long. I don’t stream movies very often & I can get a free eBook every Friday from Barnes & Noble with my NOOK. Can’t see the point of paying an extra $99 a year just to get things a couple of days sooner.
Nathan,
I understand and agree with you of the perceived “issues” with higher cost on many items.
But, I have been a prime member for many years and never have I had an issue with prime not delivering, fulfillment, refund, replacement of any item at anytime! Period, none, nada!
Contrast that with non-stop issues with delivery, fulfillment, refund or replacement via non-prime items. So much that I have promised myself to try to deal only with those merchants and items with prime.
Prime orders must be fulfilled and processed by Amazon. If you want and or need that item, your guaranteed to have that item in 2 days! If you got the item and are not happy for any reason, you return it and the very minute it hits the system as being shipped than you have your refund issued to your bank, like clock-work!
I cannot begin to express how invaluable Prime is for me. I try to take full advantage of all Prime benefits; it is my responsibility to make use of everything to get the most value!
Do I wish it were less expensive? Yes!
Do I think that Amazon has my best interest in mind (monetarily)? No!
Is Prime sometimes a sore spot with me on prices? Yes!
Now I want to bring up one point that most overlook with Amazon storefront. It is more along the lines with eBay than it is with Walmart. In so much that Amazon is a marketplace and as such they sell theirs and allow an open format for other merchants too. This creates competition.
I have read the merit of the lawsuits and of sentiment like yours, but these are not true and inaccurate. Amazon has it’s own price and does not price items of merchants. Prime is a service of both Amazon and the Merchant, Amazon may want to keep a certain profit margin on an item while that Merchant may be willing to make that item their “loss leader” to get business going.
That complaint and lawsuit makes no since applied to eBay right? eBay is a place where merchants sell and the same item is sold by many at different prices; only difference being that eBay themselves do not ship the items, nor does it compete with their merchants. Amazon does!
They know full well that I may be willing to pay a little more for that item once I factor in the time of transit, how certain I am about not needing a replacement or refund.. I have used Prime for 7 years and I know Prime inside and out.
P.s.
A perfect example of how Prime works for Amazon and merchants alike.
I have a book that I am reselling at a 60% discount of the same book new. Amazon lists it Prime and new condition. I am selling that item (like new condition) at a discount of 60%….. I read the book for a few minutes and didn’t care for it, so my loss is someone else’s gain!
I had an option and still do, to send the book to Amazon for them to fulfill (making it Prime eligible) or do fulfillment on my own. There is a fee for their fulfillment services, so it is my option to “inflate” the item’s cost to compensate for that added service they will provide me.
Now this is where it gets to be a heck of a deal for the Prime member..
Prime members enjoy worry free shopping in all instances! (like I aforementioned) Fulfillment, Shipping Time, Refund, etc. So members will opt to get Prime eligible items as often as it is possible.
I am now going to steal a sale from Amazon selling my “like new book” and it will sell because if you can save 60% and get the same Prime experience, why not?
It is a complicated situation but I guarantee you that Prime to me is no scam.
I’ve been a Prime member for 12-13 years. Up until two years ago, I was constantly in awe of Amazon’s amazing service. I never ran into any issues with deliveries not arriving on time; the products were always 100% legitimate, in original packaging, and perfect condition. I never even ran into problems with the third-party merchants.
WHAT HAPPENED?? … About 2 years ago or so, I noticed changes in the quality of Amazon’s services, on all fronts. The items I ordered often appeared to be “re-shrink wrapped” with fake-looking labels glued over the original one. These items always had something suspiciously wrong with them — for example, things like user manuals would be missing, or the product would just be thrown into its box, with no styrofoam pads or plastic ties holding it into place. At first I thought it was a fluke — but the same thing kept happening more and more often; Over the past year it has easily become the norm.
What’s worse — I figured this must be an issue when ordering from third party merchants so I began only buying items with the Prime label, that were fulfilled by Amazon. It’s hard to believe, but THE SAME THING happens with items fulfilled by Amazon!
And yes, the increased price for Prime orders is highway robbery. It NEVER used to be that way; this is also a recent underhanded move by Amazon. I’ve been shocked by this new practice — that I actually have to pay $5 or $6 more for an item if I want the Amazon Prime service … which I’M ALREADY PAYING FOR! (And what’s up with the annoying new “Add-On items” thing?).
I know a lot of the comments don’t see this as a big deal, but as far as I’m concerned it’s unethical to say the least, plus a total slap in the face to Amazon’s best customers, their “Prime members”. My response to the very first comment — oh yes, it IS a big fucking deal.
One last thing: I need a new place to shop online. Anyone know of a good alternative to Amazon??
I know exactly how you feel. I too have witnessed a degradation in Amazon’s services over the past couple of years. That’s usually what happens when a company starts to monopolize an industry, so it’s not really surprising. I got sick of deliveries taking 2 weeks for super saver shipping. It used to be so much faster. I think that they deliberately started making them slower in order to get people to subscribe to Amazon Prime for faster shipping. I got sick of it and started ordering from eBay instead and found that shipping is much faster. I also discovered that eBay almost always has the same price as Amazon; sometimes it even works out a couple of bucks cheaper because shipping prices aren’t so convoluted.
Number five on this list gives some alternatives to Amazon that I mentioned when they jacked up the threshold for super saver shipping a few months back. Since then I almost never order from Amazon anymore, although I still use their site to find items and read reviews first.
I just did the thing where you order a Prime gift membership for $79 and have it delivered when my current membership expires. That way I got another year at the old price, but I think that capability has now expired. However, in doing so I discovered another benefit. The Prime shipping can be shared by up to four other members of the household if the account holder invites one of them. This way my wife is able to order with Prime shipping using my account, so I don’t have to order things for her. Great for her, great for me, and great for Amazon I am sure.
Maureen: “I’ve been a Prime member for 12-13 years.”
The service was launched in the US in 2005 and in other countries at least 2 years later; do the math :D.
I’ve been a member for the past 8 years and love it. I never refer to the shipping as “free”, but as “no additional charge”. Prime membership doesn’t relieve you from a responsibility to comparison shop–they never claimed that it did. Sometimes Amazon’s price is enough higher that someone else’s price+shipping (5-7 day ground) is cheaper; in those cases it’s up to you to decide whether the difference is worth it to get it in two days. That higher Amazon price is the same for non-Prime-members. (As of 10/2012, I also have CA sales tax to consider–out-of-state non-Amazon vendors usually don’t charge it). As is, I have more than 100 orders Prime shipped each year, making the average cost per order $1 or less at the new price (my membership renewed at the old price last month).
I was a member for five years before they added Prime Instant Video and the Kindle Lending Library, etc; I use the Instant video and free-to-read books occasionally, but if they took that fluff away I’d still renew my membership, even at the increased price.
I agree Nathan that Amazon Prime Instant Video leaves a lot to be desired and I’m sure if you look closely there are hidden fees and such. I find your article informative but it doesn’t change my mind. Bottom line for me is that I love the service and I hate waiting. I guess it just boils down to what your expectations are of the service and how much you’re willing to spend for it. Some people spend the extra money on customer service like that though if it means faster service.
I was skeptical, but all the services Prime offers are all attractive to me, so I find it well worthwhile.
MikeyTS,
This is how my version of “math” works: I remembered signing up / registering with Amazon when my daughter was 1 or 2 years old. (It must have been a momentous occasion for me, because I remember it all so clearly. I know, that’s pretty pitiful … but back then, all this stuff was so new). Anyway, my daughter is now 14. So I subtracted … and viola — 12-13 years.
I wasn’t trying to exaggerate or anything. I mistakenly associated ‘registering’ with Amazon with becoming a Prime member.
So I stand corrected! (But the rest of my comment still stands.:-)).
I’m glad to hear that you and many others here aren’t experiencing the same frustrations as me. I’m wondering if Amazon has me pegged now, and knows I’m easy prey for their most ‘scammish’ merchandice? Because I’ve also been frustrated by the lame search results I get there — also a fairly recent development.
Either way, I was always a huge Amazon fan; it kinda breaks my heart to stop shopping there. But it’s become too huge of a hassle (constantly needing to return items), as well as a huge waste of money (constantly putting off returning the items until it’s too late!).
On that note … TO Nathan: thank you so much for the list of alternatives!
P.s. Just for the record: I’ve never been a ‘problem customer’ in my life; never even sent a dinner back.
Ouch, looks like you were slammed by the other readers for this particular post… IÂ personally got sick of Amazon’s increasingly awful customer service &Â high prices, and effectively gave up on them a year or so ago.
Two related bits of info IÂ learned this evening in Ars Technica discussions regarding ShopRunner, the Prime-like (free 2-day shipping)Â service used by rivals like Newegg:
1) They’re giving a free year of service to Prime account holders that haven’t renewed at the higher rate; there’s a banner on the site proclaiming it.
2) Users reported that the free “3 month” trial they’d signed up for partway through last year was being automatically extended by the system every 3 months or whenever they tried to cancel it.
One or both might be worth passing on to the other readers. IÂ have no idea what they charge per year, but a free trial of whatever length sounds nicer than Prime’s fees to me.
I and my family have used Amazon Prime for 2 years now. Saying you pay more than $99 is a flat out lie. If you find an item that costs less than the prime equivalent with 2nd day air shipping added then buy it instead, having prime doesn’t mean you can only buy Prime items. Also Netflix doesn’t have a deal with HBO to get many of their previously aired shows like prime does. The other thing that isn’t mentioned in your article is you can have 4 family members accounts added to your prime for no extra cost, so it may cost less than $99 if you split it with someone else.
This blog is a joke. Where is the hidden charge? When Amazon is transparent about all the other options you have, it’s not hidden, is it?
All the examples you gave actually prop up how truly Amazon’s 2 day shipping is.
I ordered two incredibly bulky items (modular kayaks) just yesterday. With Prime, I got free shipping in 2 days! Had I ordered it from LL Bean, they wanted to charge $65 per piece for extra handling on top of their shipping on top of the fact that each piece was $50-100 more expensive. Like I said, this blog needs more work and better examples.
im with these guys, i like knowing the fact that my item will be here in 2 days. others free shipping can be 1-2 weeks out. i dont wanna wait that long. i still have found many of the items ive purchased still to be cheaper then others and its available with prime shipping. nough said…
I use their service, and you are mistaken on several items.
1) The “free” shipping is 2 day, the shipping on the items you listed were shipped via ground 6-10 day shipping, and are also guaranteed to ship / arrive, well worth the little extra cost to not risk being left without your item, and paying more for it 3-4 weeks later!!
2) The video streaming has a lot of content that you will not be able to get on netflix, and is well worth it, if you would like to watch a series like Stargate Atlantis and not have to pay $100.00+ to “rent” it.
3) If you only use it once, you are not saving, I agree, but when you use it say 20-30 times a years, the savings are huge
I order things on Friday / saturday all the time, and when I order things on Prime, I get them by Monday, Sunday even, and I have not once had to return an Item for being wrong, broken, etc
So in conclusion, even if I pay $5.00 here and there extra for the time, it is well worth it to get the item I ordered, and get it fast!!