As a consultant helping small businesses maximize their ecommerce presence, one of the most common questions I get asked is: "Is Amazon Prime worth it?"
My clients sell products through Amazon and are deciding whether to purchase a Prime subscription themselves to access member-only benefits. They want to know if the $139 per year Prime fee will pay off through features like free expedited shipping.
Based on over 10 years advising entrepreneurs on their Amazon selling strategy, here is my in-depth analysis on the cost of an Amazon Prime membership and whether it provides strong value, especially for frequent Amazon shoppers and small ecommerce businesses.
Breaking Down the Different Prime Membership Options
Amazon Prime membership costs:
- $14.99 per month
- $139 per year
For college students, Prime Student is $7.49 per month or $69 per year.
For those qualifying for government assistance programs, Prime discounted rate is $6.99 per month.
Over 200 million people globally are Amazon Prime members. Most opt for the annual membership since it breaks down to just $11.58 per month, saving them 17% versus paying monthly.
Prime also offers a 30-day free trial for new members to test it out. During busy shopping periods like the holidays, some even use the free trial strategically to enjoy Prime benefits temporarily.
Comprehensive List of Amazon Prime Benefits
The core Prime benefit that converts most members is definitely the free expedited shipping. But Prime has expanded over the years to provide additional perks and create stickiness beyond just faster delivery.
Shipping & Delivery Perks
- Free 1-2 day delivery on over 100 million products
- Free same-day delivery on ~3 million items
- Release-date delivery for pre-orders
- Prime Now 2-hour delivery windows
Entertainment Benefits
- Prime Video ad-free streaming
- Prime Music unlimited listening
- Prime Reading ebooks/magazines
- Prime Photos cloud storage
Shopping Benefits
- Prime exclusive deals and savings
- 30 minute early access to Lightning Deals
- Prime Wardrobe to try clothes before buying
Between 2005 to 2021, the number of available products eligible for Prime‘s expedited shipping exploded from 1 million to over 100 million items, dramatically expanding the utility of a Prime membership.
And for small businesses selling on Amazon, Prime members drive higher customer lifetime value. On average, Prime customers spend $1,400 annually on Amazon compared to $600 for non-members.
How Amazon Prime Compares to Walmart+, Target Deals and Other Retail Memberships
As Amazon Prime‘s popularity grew, other major retailers launched their own membership programs to compete for valuable subscribers.
Walmart‘s delivery subscription Walmart+ costs $98 per year and offers free 1 day shipping on certain items over $35 without a minimum basket size. However, Walmart+ has one tenth the number of Prime‘s subscriber base at just over 15 million members.
Target‘s loyalty program Target Circle provides special deals, early exclusive access to sales, and a 1% rebate on purchases. But it does not have a monthly or annual fee to join.
Amazon Prime remains the clear leader among retail membership programs in terms of size and growth. Analysts estimate over 80% of American households have at least one Prime member in their family to take advantage of expedited shipping.
Cost-Benefit Analysis: Is Amazon Prime Ultimately Worth the Price?
In my experience consulting for small ecommerce businesses, the recurring value provided by Amazon Prime‘s benefits typically exceeds the $139 annual fee for frequent Amazon shoppers:
- Households that spend over $1,100 annually at Amazon break even from using free expedited Prime shipping alone
- Access to Prime entertainment benefits like movies and music saves the average person hundreds per year additionally if they are existing subscribers to those types of services
- Early deal access, Prime Day discounts and other special promotions offer extra cost savings for members on top
Of course, the fee investement may not pay off if you rarely shop on Amazon or do not use Prime‘s media features. But for most Amazon customers, Prime offers an immense amount of practical value.
As small businesses evaluate tools that help boost sales and growth, having Prime helps capture a massive pool of 200 million loyal subscribers. The benefits now go far beyond just fast shipping and it continues innovating on additional perks.
So in short – yes, based on my expert analysis working with entrepreneurs, an Amazon Prime membership is very worthwhile, especially if you shop regularly on Amazon or operate an ecommerce business selling there!
I hope this comprehensive overview helps shed light on exactly what is included with Prime today, how it compares competitively, and whether that $139 annual investment makes sense for getting the most out of selling on Amazon.
