If you are an Amazon Prime user, you should know you will be paying US$20 more a month soon for using Amazon Prime services. This 17% increase is supposed to offset higher shipping and wages costs the company says it is dealing with.
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According to Reuters, Amazon beat its profit expectations for the Christmas season, and its stock has jumped by 17% in extended trading. These gains will expand CEO Jeff Bezos‘ wealth by a whopping US$20 billion.
For the holiday quarter, Amazon earned $14.3 billion, double its net income from a year earlier. That included a pre-tax gain of $11.8 billion from its stake in electric car maker Rivian Automotive (RIVN.O).
On the heels of a windfall from greater at-home shopping in the pandemic, Amazon has poured money into its operations to manage disruptions, most recently the Omicron variant of COVID-19. It has marketed signing bonuses to attract hundreds of thousands of workers in a tight labor market, and it has paid more for shipping because it could not get products into the right warehouses.
Now, as analysts have expected, Amazon is raising the price of Amazon Prime. U.S. monthly fees for the fast-shipping and media service are increasing to $14.99 from $12.99, and annual membership is going up to $139, from $119. The change is effective Feb. 18 for new members and reflects greater benefits such as savings on prescription drugs and faster delivery, Amazon said.
Chief Financial Officer Brian Olsavsky told reporters on a conference call that Amazon expected some members to quit, but retention loss “hasn’t been large in the past.” The annual fees last went up by the same amount four years ago, and four years before that.
Reuters
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Last Updated on April 9, 2022.
