Is Having an Amazon Prime Subscription Worth the Annual Fee?
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Here's your Money Briefing for Tuesday, February 6th. I'm J.R. Whalen for The Wall Street Journal. Amazon has raised the annual cost of its Prime membership about once every four years and has increased the fees for other services as well. That's led some to question whether they're getting their money's worth.
And then there were services that were previously included or, quote unquote, free in as a part of the membership that became no longer free or included. So for one example is my most used perk, which was Whole Foods free delivery, which Amazon eventually charged $9.95 for each delivery.
We'll talk to WSJ personal tech columnist Nicole Wynn after the break.
Recently, Amazon raised the fee for its Prime membership from $119 to $139 per year. But is it worth it?
How has Amazon Prime's annual fee changed and why are customers questioning it?
WSJ personal tech columnist Nicole Wynn was a Prime customer and recently quit. She joins me now. Nicole, how long were you an Amazon Prime subscriber? And why did you cancel your membership?
I first signed up for Prime in 2010, initially as a student. It was just an unbeatable deal. And then I became hooked on Prime and eventually paid full price. And I recently canceled my membership because I felt like I wasn't getting as much as I wanted to out of it for the price.
Lots of services similar to prime charge fees. Why did Amazon's fee push you to do that?
It felt like it was incremental over time. Initially, the offering for $79 was fast, free shipping, and that's really all I needed. And then over the years, it bumped up to $10. 99 and then 120 and eventually became 139. And then there were services that were previously included or quote unquote free in as a part of the membership that became no longer free or included. So for one example is my most used perk, which was Whole Foods free delivery, which Amazon eventually charged $9.95 for each delivery.
Did Amazon have a $9.95 delivery fee from the moment it acquired Whole Foods? Was that from the start?
No. So initially, Whole Foods delivery was free within two hours, as long as you hit a certain minimum. And then at some point, it decided to charge a $9.95 fee. And I was okay with paying that for a while, but similar additional fees kept adding up. The freshest one is a $2.99 charge to watch Prime Video without ads. And that was a perk that you could get included in your Prime membership a month ago, and now you have to pay $3 a month for it. So there were just incremental hits that sort of added up over time.
But millions of people pay the fee. What value do they see in it?
Prime includes a number of perks. And so if you have a household of people who share your Prime membership, there's a pretty good chance that at least one person will benefit from one or several of these perks. So there's not only fast and free shipping, but also a growing library of books and magazines to read. There's streamed content on Prime Video, music that you can play in shuffle mode. That's included in your membership. There's a credit card that gives you 5% cash back on Prime purchases. Prime is designed as a bundle and bundles look like good deals to consumers. And that's why a lot of people have signed up for Prime and have paid for it and continue to pay for it.
When you canceled your own membership, were you concerned that you would miss out on the assorted services and perks that went along with that?
Initially, yes. I was most concerned with being able to order things on Amazon and get them in a timely manner. Then I realized I didn't stop shopping at Amazon after I canceled my Prime membership. And I realized that I could continue getting free shipping on Amazon without having to pay for a Prime membership, which is the main reason why I had it. And I didn't mind waiting the five days it took me to receive my items. And sometimes my items got to me in two days, which was a nice surprise. I sort of found myself continuing to use Amazon in the same way I had before, but without having to pay for that $139 Prime membership.
So there are ways to get around the fee and still get services and perks that you like, but it just wasn't quite as immediate?
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