Amazon is raising the price of Prime in the US to $139 per year, up from the $119 annual fee that was instated four years ago. The price hike is meant to address higher costs Amazon is facing across the board, from shipping to labor to construction, according to analysts.
The price change will go into effect for new members on February 18th and for current members after March 25th. The price for a monthly membership to Prime is also going up to $14.99 per month from $12.99 per month.
Amazon cited “the continued expansion of Prime member benefits as well as the rise in wages and transportation costs” as reason for increasing the service’s price.
Higher costs across led Amazon’s operating income to dip substantially during the final quarter of 2021, falling to $3.5 billion from $6.9 billion a year earlier, the company announced in an earnings release this afternoon. It’s the second quarter in a row that Amazon’s profit has dipped.
Amazon last raised the price of Prime in April 2018, citing higher costs around shipping and other perks. Prior to that, the price was raised to $99 per year in 2014, after having remained at $79 annually for nearly a decade since its launch in 2005.
Prime passed 200 million subscribers last year. Amazon has continued to expand the service’s offering, growing from quick shipping speeds to also include access to Prime Video, music streaming, Twitch perks, and more.
Amazon CEO Andy Jassy said some cost hikes the company is facing are “short-term challenges” but will continue in the coming months. Amazon “saw higher costs driven by labor supply shortages and inflationary pressures” during the holidays, Jassy said, “and these issues persisted into the first quarter due to Omicron.”