AfterDawn: News

Amazon Prime reaches 10 million customers, Prime members spend much more

While Amazon has never disclosed how many shoppers have signed up for their Prime program, Morningstar is reporting that the figure has just surpassed 10 million.

Amazon Prime costs $79 per year (or half if you are a student or new mother) and offers free two-day shipping, $3.99 overnight shipping and access to Amazon's streaming video catalog.



More importantly for the e-tailer, the report suggests that Prime now accounts for 30 percent of Amazon's entire operating income, making the club wildly profitable.

Amazon has an active customer base of about 180 million, but Prime members accounted for 9 percent of all purchases, a massive imbalance. The report says Prime members spend $1,224 a year versus $505 for non-Prime users.

In the report, Morningstar says that Amazon made about $78 per Prime member in 2012, after taking out the cost of expedited shipping and the streaming video licensing. Since Amazon breaks even on its shipping and other costs through purchases customers make, the subscription fee itself is completely profit to them.

Written by: Andre Yoskowitz @ 13 Mar 2013 11:39

• Previous article

• Netflix users can now link their accounts to Facebook

• Next article

• Nokia Lumia 928 headed to Verizon next month

• 3 comments

• SomeBozo

  I think after my own personal dealings with Amazon, they simply rock. I had an issue with a company and a defective product, contacted the manufacturer and they said contact the business i bought it from but they refused. Luckily the purchase was through Amazon's and I used their A-Z Claim, Amazon's stepped in, while the placed I bought it from absolutely refused the refund and honor the manufacture's refund guarantee, after a bit of going back and forth, Amazon's rep simply said honor the refund or you will be prohibited from doing any business on Amazon, until this issue is resolved. Saved me $300 (US).
  
  For me Amazon seems like a decent company, trying to do the right thing. I think we can all agree, this seems rare now a days. Seems most other companies profit is the bottom line, we have your money, and a new sucker (oops customer) comes around every minute, why be loyal to any customer? It only adds more cost?
  
  
  

  13.3.2013 15:45 #1

• Justoneguy

  Originally posted by SomeBozo: I think after my own personal dealings with Amazon, they simply rock. I had an issue with a company and a defective product, contacted the manufacturer and they said contact the business i bought it from but they refused. Luckily the purchase was through Amazon's and I used their A-Z Claim, Amazon's stepped in, while the placed I bought it from absolutely refused the refund and honor the manufacture's refund guarantee, after a bit of going back and forth, Amazon's rep simply said honor the refund or you will be prohibited from doing any business on Amazon, until this issue is resolved. Saved me $300 (US).
  
  For me Amazon seems like a decent company, trying to do the right thing. I think we can all agree, this seems rare now a days. Seems most other companies profit is the bottom line, we have your money, and a new sucker (oops customer) comes around every minute, why be loyal to any customer? It only adds more cost?
  
  I agree, and the money I save on shipping throughout the year with prime pays for itself, especially around the holidays.

  13.3.2013 23:48 #2

• Mrguss

  lol - Amazon: My 2nd. home
  

  +5000

  14.3.2013 00:40 #3