A new report suggests that Amazon might be planning to increase the price of its Amazon Prime loyalty program.
According to Daily Finance (opens in new tab), Amazon company might be planning to raise the price of the loyalty program membership as it is incurring losses due to all the virtual freebies Amazon offers to Prime members.
Amazon Prime member needs to pay a $79 per year for free two-day express shipping on unlimited number of items, unlimited access to thousands of movies and TV shows, view Prime instant video service and no minimum order size. Members also get an eBook free every month from the Kindle eBook lending program.
Analysts estimates that the company spends $90 on each customer when they include the free shipping and free access to movies and TV shows, making Amazon Prime a loss making entity. It is unclear how many people subscribe to Prime but Amazon has hinted that the numbers run in millions.
Amidst all this, analysts expect Amazon to increase the membership prices. However, it might not be what the company has in mind. The program gives users to order items freely, assured of the two day shipments, giving a bump to overall sales. Also, when users have free access to digital content, they might not choose to avail the free shipping offer, which is good enough for Amazon.