Amazon will raise the price of Prime from $99 to $119 in the U.S.

Amazon is increasing the price of its Prime membership in the U.S. for the first time in four years, the company’s chief financial officer announced on a call with analysts on Thursday.
 
Effective May 11, new subscribers will pay $119 a year for the shipping and entertainment membership program, up from $99 today. The new annual fee will apply to current Prime members starting with renewals on June 16. Amazon last raised Prime’s fee in 2014, when it cost customers $79 a year.
 
Amazon CEO Jeff Bezos last week announced that Prime had more than 100 million members worldwide — a surprise unveiling since the company had never previously reported the number of Prime members.
 
Prime is the most important lever in Amazon’s dominant online retail machine. Prime members make more purchases on Amazon than non-Prime members and spend more per year.
 
But the program is incredibly expensive to fund for Amazon. The number of products available for free two-day shipping through Prime has grown from 20 million in 2014 to more than 100 million today, Amazon CFO Brian Olsavsky said on the call. Amazon has invested heavily in its own logistics network to supplement UPS and FedEx deliveries to meet demand.
 
Since the last increase, Amazon has also introduced a two-hour delivery service called Prime Now that offers free speedy delivery of a limited selection of groceries and other popular merchandise from Amazon and local merchants. Prime Now today includes Whole Foods inventory in 10 U.S. metro areas.
 
Amazon also has spent billions to acquire and create a large library of movies and TV shows that Prime members stream for no extra cost. Amazon executives say that the entertainment offering helps court new Prime members and gives current Prime members another reason to stay with the program.
 
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