Amazon Prime is among the e-commerce giant’s most effective weapons. It tethers online buyers to the site. There is evidence that Prime buyers shop Amazon more often than non-Prime buyers. Amazon.com Inc. (NASDAQ: AMZN) also uses Prime to draw sellers.
Consumer Intelligence Research Partners just released a study showing that Amazon Prime membership rose 8% to 180 million in March compared to the same month of last year. Prime members pay $15 a month or $140 a year. As part of a membership, they get free shipping on many items, special deals that often include discounts, and Prime Video, a competitor to Netflix. These factors have helped increase the membership. According to Bloomberg, “The most recent data, showing 75% of US shoppers have Prime memberships, is a clear indication that Amazon is still gaining new subscribers.”
Costco Wholesale Corp. (NASDAQ: COST) is the only major retailer with a similar model. The big-box retailer charges between $60 and $120 annually for membership. One crucial difference is that non-members cannot shop at Costco at all. As with Costco, membership is a revenue stream of its own.
Amazon needs every advantage it can get. As the largest e-commerce company in America, it has thousands of rivals. Nevertheless, its North American online revenue was $106 billion in the fourth quarter of last year, up from $93 billion in the same quarter the year before. (See how much money Amazon makes every minute.)
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