Amazon is actually raising its annual prime fee via $99 to $119 beginning May 11, the company told investors while reporting first quarter earnings Thursday.
“There’s all kinds of brand-new features which we’ve continually added to the Prime program,” Brian Olsavsky, Amazon’s chief financial officer, told investors Thursday, noting customers can currently get products within two hours. “the item’s much different than the item was in 2014. This particular is actually a reflection of which — a better reflection of the cost value of the program.”
brand-new annual Amazon Prime subscribers will pay $119 a year for the membership program, a $20 increase via $99, beginning May 11. The brand-new annual fee will apply to membership renewals beginning June 16.
The fee hike comes a week after Jeff Bezos told shareholders which Amazon’s Prime program currently includes more than 100 million members. Amazon increased its Prime monthly fee via $10.99 to $12.99 in January. This particular is actually once in four years which Amazon has raised the cost of annual Prime membership.
Olsavsky told investors on the call which Amazon’s Prime service has grown exponentially since the company first launched the item. Prime members can currently get more than 100 million products through free two-day shipping compared to 20 million in 2014. The cost of two-hour shipping in addition to delivery via Whole Foods stores also informed Amazon’s decision to boost cost, he noted.
Amazon Prime continues to juice company profits. Sales via subscription services, which include Prime, were $3.1 billion from the company’s first quarter — a 56% increase via the same time last year.
Amazon Web Services is actually also proving quite lucrative. the item brought in $5.4 billion in net sales over the first quarter in 2018, a 48% increase via $3.6 billion during the same time last year — while the category which includes its net advertising sales grew 132% compared to the first quarter of last year, doing roughly $2 billion in sales.
While much of which revenue is actually driven by the platform’s third-party sellers, bigger retail players like Procter & Gamble find their investments in Amazon advertising are paying off, Cooper Smith, research director in addition to resident Amazon analyst at L2 Inc, a consumer product research firm, told BuzzFeed News.
“If you walk into WPP or any large agency, they’re going to tell you they’re increasing ad budgets on Amazon for their clients,” said Smith. “You don’t hear via anyone which they’re decreasing their budget This particular year. Again, the item’s a testament to where the momentum is actually going in addition to the momentum is actually moving toward Amazon’s best interest.”
Amazon’s overall net income for the quarter was $1.6 billion compared with just $724 million during the same time last year. Its closing stock cost was $1,517.96.
Yet Amazon’s outlook for the year may not be as rosy as its first-quarter earnings. Amazon’s CEO Jeff Bezos has come under fire via President Trump in recent weeks, who has accused the company of avoiding taxes in addition to sinking the US Postal Service.
Bezos also took heat in Berlin, Germany, on Wednesday via union workers protesting their meager pay. Amazon disclosed last week which the median pay for its employees was just $28,446 in 2017, which means half of Amazon’s employees earned less than which amount. Meanwhile, Bezos’ annual 2017 compensation was $1,681,840.
Amazon was also recently listed from the National Council for Occupational Safety in addition to Health’s list of 12 companies which “put communities in addition to workers at risk.” The agency criticized the company for creating unsafe work conditions which led to seven “preventable deaths” while also requesting billions in tax breaks for a brand-new headquarters, in addition to $1 billion the item already received via state in addition to local taxpayers.