What just happened? The price of everything seems to be going up these days, including Amazon's Prime subscription. The company is increasing its annual fee for Prime users in the US by $20 annually, from $119 to $139, while those who pay monthly will be paying $14.99 instead of the previous $12.99.
The changes will come into effect for new Amazon Prime members on February 18. Existing members have a bit longer; the new price will apply after March 25, 2022, on the date of their next renewal. The change is coming to the US only for now. Amazon said during an investor call that it examines pricing in other countries each year but had no announcements to make.
Amazon says the reason behind the price hike is "the continued expansion of Prime member benefits as well as the rise in wages and transportation costs."
The last time Amazon raised its US prices was in 2018, when it once again added $20 to the annual Prime fee---it had been $99---and $2 to the monthly sub. The previous rise, to $99, was in 2014.
News of the price hike comes after Amazon's quarterly report showed net sales in Q4 were up 9% year-over-year to $137.4 billion, while net income almost doubled YoY to $14.3 billion, beating Wall Street expectations and pushing shares up 17% in after-hours trading. However, operating income decreased to $3.5 billion in the fourth quarter, compared with $6.9 billion in Q4 2020, marking the second quarter in a row that Amazon's profit has declined.
New Amazon CEO Andy Jassy revealed that the company ran into some issues over the holiday season. "As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron," he wrote.
According to Amazon, US Prime members received more than 6 billion free deliveries in 2021, and over 200 million members worldwide streamed shows and movies.