If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(CNBC)   Amazon may price its Prime Shipping and Streaming service out of business   (cnbc.com) divider line 63
    More: Fail, mobile payments, lows  
•       •       •

4016 clicks; posted to Business » on 31 Jan 2014 at 3:14 AM (24 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



63 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest

First | « | 1 | 2 | » | Last | Show all
 
2014-01-30 11:55:56 PM
FTFA: "Additionally, Amazon said during its conference call it may increase the cost of its popular Amazon Prime subscription by $20 to $40 due to higher fuel and other shipping costs."

So since Amazon charges $79 for Prime, I'm guessing it's increasing by $40, not $20. But the author apparently is the worst English major evar. Or am I missing something?
 
2014-01-31 12:11:50 AM
Maybe they meant they're considering increasing it between $20 to $40?

Either way, it's a great service.  I have no problem paying extra for it.  We order so much junk off of amazon these days, it probably pays for itself halfway through January.
 
2014-01-31 12:14:11 AM
Increasing to somewhere between $99 and $119?  Is that what that means?
 
2014-01-31 12:17:51 AM

hb0mb: Maybe they meant they're considering increasing it between $20 to $40?

Either way, it's a great service.  I have no problem paying extra for it.  We order so much junk off of amazon these days, it probably pays for itself halfway through January.


That's the way I read it as well.  An increase of $20 would allow them to keep it just under the $100 mark, which is a big psychological barrier to impulse purchases.

If the increase is due to increased fuel charges, maybe they should offer an Amazon Instant Video only plan for less that doesn't include the free shipping.  I don't ever buy any goods from Amazon, but I'd be willing to look into their streaming service if it was low priced and offered some things I wanted not available on Netflix.
 
2014-01-31 12:20:21 AM
I'm glad I'm not the only one who was baffled by that particular statement.

Depending on how much they raise it, and how much people use it.  They may lose subscribers, or maybe they don't.  Given how much my wife uses her Prime account.  It would still be a deal.
 
2014-01-31 12:25:44 AM
Wasn't there an article recently about Amazon considering lowering the price of Prime?
 
2014-01-31 12:43:52 AM
Higher gas prices?

charts.gasbuddy.com
 
2014-01-31 12:47:38 AM

fusillade762: Higher gas prices?

[charts.gasbuddy.com image 670x325]


It's one of the tried-and-true go-to weasel excuses when you want to raise prices.

See: Airlines.
 
2014-01-31 12:56:57 AM

Dallymo: Increasing to somewhere between $99 and $119?  Is that what that means?


Still a good deal to pay it all at once since you'd spend that anyhow over a year for Netflix or Hulu.
 
2014-01-31 01:38:29 AM
I am surprised at how long Amazon has been getting away with it without significant loses to begin with.

Shippin aint cheap
 
2014-01-31 03:01:36 AM

bluorangefyre: Still a good deal to pay it all at once since you'd spend that anyhow over a year for Netflix or Hulu.


Or, the option we took, which is both Prime and Netflix streaming, and dropped cable.
 
2014-01-31 03:37:30 AM
The wife and I probably spend five or six grand a year on Amazon. Not a ton, but nothing to sneeze at. As long as it's tax free, all is well. Hooray for eBay and Craigslist as well.

/also, it's great that since she's a doctor, she can always claim to be in school..soooo AP is cheaper than it would be.
 
2014-01-31 03:38:59 AM
FTFA: According to the company, more than 1 million people signed up in the third week of December alone.

Yeah, for a free trial to get their shiat shipped by Christmas. 999,999 of these people then canceled in early January.

/That's what I do
 
2014-01-31 03:46:53 AM

Two Dogs Farking: FTFA: According to the company, more than 1 million people signed up in the third week of December alone.

Yeah, for a free trial to get their shiat shipped by Christmas. 999,999 of these people then canceled in early January.

/That's what I do


/Walks away whistling innocently...
 
2014-01-31 05:38:47 AM
Do I want to pay another $20-$40 a year? Not really. But I buy things like TV's off amazon. Shipping on the one I bought last year would have been >$100. No way is it going to make me cancel.
 
2014-01-31 06:35:04 AM
NASDAQ's site expects Amazon's P/E ratio to correct over the next few years.

screening.nasdaq.com

This means one of three things:
a) Amazon's stock price takes a nosedive (difficulty: may require investors to actually understand fundamentals)
b) Amazon's earnings increase hugely and the stock price stays the same (let me laugh harder)
c) NASDAQ is having really awesome hallucinations (sadly, the most likely)
 
2014-01-31 07:05:37 AM
Hmmm, I wonder who understands the price elasticity of demand of Amazon's customers and the likely net effect on profitability best. Is it...

a) Random Internet commentators
b) "Financial" journalists
c) The company that has mountains of data on customer behavior and is famous for its ability to successfully tweak its offerings to maximize profit

Hint: it's always c.
 
2014-01-31 07:18:12 AM
One thing I don't get is how folks breathlessly praise and support Amazon like they are different than any other gargantuan conglomerate. Remember when people were raising Google on high proclaiming they were different? It should be pointed out that Amazon now is one of the largest owners of data centers in the US - and growing. I'm sure that'll just be used to allow folks to store their music and pictures in the cloud and not for anything worrisome.

cman: I am surprised at how long Amazon has been getting away with it without significant loses to begin with.

Shippin aint cheap


It's not cheap for you and me, but when you are likely the shipping company's biggest customer on the planet, they probably get a pretty jaw-dropping discount. I suspect the markups for the products more than make up for their shipping cost and that they could probably ship everything for free all the time and still make a killing.
 
2014-01-31 07:23:57 AM

Land Ark: One thing I don't get is how folks breathlessly praise and support Amazon like they are different than any other gargantuan conglomerate. Remember when people were raising Google on high proclaiming they were different? It should be pointed out that Amazon now is one of the largest owners of data centers in the US - and growing. I'm sure that'll just be used to allow folks to store their music and pictures in the cloud and not for anything worrisome.


Not to mention their treatment of workers.
 
2014-01-31 07:29:51 AM

Land Ark: One thing I don't get is how folks breathlessly praise and support Amazon like they are different than any other gargantuan conglomerate.


I praise and support companies that give me what I want at a good value. be it a mom and pop corner store, or a gargantuan conglomerate.

Land Ark: Remember when people were raising Google on high proclaiming they were different?


they were. Now they're getting to be annoying. therefore no praise, and less support from me.
 
2014-01-31 07:37:06 AM
Hopefully Canada's amazon won't do this. If they raise it by $40 I would probably drop my prime account. Mostly because in Canada it is just a shipping thing, no instant video or lending library. Which is annoying, because you can't even watch the shows that Amazon produces (which shouldn't have any rights issues).
 
2014-01-31 07:42:09 AM
I would have no problem with a price increase, even if it went up $40 that still puts it in at around $10 a month, but I make heavy use of all the prime related services, still an excellent deal IMO.
 
2014-01-31 07:42:56 AM
$10 bucks a month for free streaming and free shipping on everything I purchase?

Deal.
 
2014-01-31 07:59:35 AM
Amazon is pretty marketing savy.   I'm betting that they pair up a price increase announcement with the unveiling of a new Prime Service benefit or product.   Like their rumored  live TV streaming or their upcoming video game console.
 
2014-01-31 08:28:26 AM
I'd probably still pay it. I share the free shipping portion of Prime with my wife and oldest daughter, so all three of us receive that benefit (you can share with, I think, up to four family members).  Plus streaming video, plus a free ebook every month of the year.

Some complain that Amazon's prices aren't all that great anymore, which is sometimes true.  But living in Philadelphia, I find that most of the prices are still less expensive than buying them locally, AND I don't have to deal with Philly traffic to get them.

/subscribe & save
 
2014-01-31 08:32:06 AM
I hate to encourage the practice, but at $99 or $119, it's still a value for me. We order enough online and are impatient enough to want it in two days. Frankly, it's worth it knowing when a package will exactly arrive so I can plan around it too.
 
2014-01-31 08:40:08 AM
I'd drop it at that price- even without prime shipping I used to get things in a couple days (virtue of where I live and the frequency of deliveries). I also don't order very much from Amazon that I care about getting in 2 days. It is nice, but not a necessity.
The streaming library is fine, but I prefer netflix, and only dropped my netflix account because prime was a better deal. If they increase it to $99 a year, then netflix is cheaper.
I have a kindle, and I get the free books too, and the selection is crappy- I get much better from my (government) library.
 
2014-01-31 08:45:52 AM

Yankees Team Gynecologist: Land Ark: One thing I don't get is how folks breathlessly praise and support Amazon like they are different than any other gargantuan conglomerate. Remember when people were raising Google on high proclaiming they were different? It should be pointed out that Amazon now is one of the largest owners of data centers in the US - and growing. I'm sure that'll just be used to allow folks to store their music and pictures in the cloud and not for anything worrisome.

Not to mention their treatment of workers.


The Total Fark left is in denial about that. They will still weigh in anytime Walmart is mentioned though.
 
2014-01-31 08:47:27 AM
I typically order in bulk in Amazon, so I get free shipping anyway.
 
2014-01-31 08:52:17 AM

mechgreg: Hopefully Canada's amazon won't do this. If they raise it by $40 I would probably drop my prime account. Mostly because in Canada it is just a shipping thing, no instant video or lending library. Which is annoying, because you can't even watch the shows that Amazon produces (which shouldn't have any rights issues).


Your government sucks. That is why.
 
2014-01-31 08:58:43 AM
If they increase it by $40...

theelephantgun.files.wordpress.com
 
2014-01-31 09:15:15 AM
At the suggested new price range, I would still consider it worthwhile but any hickup in service might be a tipping point for cancelation.
 
2014-01-31 09:44:34 AM
FTFA: The world's largest Internet retailer posted earnings of 51 cents a share on sales of $25.59 billion, versus expectations for 66 cents a share on sales of $26.06 billion, according to a consensus estimate from Thomson Reuters.

So they made a nice profit, but they didn't make enough profit, so eff the customers?  Seems like a sound business plan.
 
2014-01-31 09:53:26 AM

Katie98_KT: I'd drop it at that price- even without prime shipping I used to get things in a couple days (virtue of where I live and the frequency of deliveries). I also don't order very much from Amazon that I care about getting in 2 days. It is nice, but not a necessity.


That is sort of the thing where I am at. The main amazon.ca warehouse is outside of Toronto. I am in Ottawa, so it is very rare that something wouldn't come in a couple of days even with regular shipping. The only nice thing is not having to worry about getting over the $25  cutoff to get free shipping, especially when sending gifts. But if they raised the price (and I am not getting the other prime benefits that US users get) it might not be worth it.
 
2014-01-31 09:54:46 AM

czetie: Hmmm, I wonder who understands the price elasticity of demand of Amazon's customers and the likely net effect on profitability best. Is it...

a) Random Internet commentators
b) "Financial" journalists
c) The company that has mountains of data on customer behavior and is famous for its ability to successfully tweak its offerings to maximize profit

Hint: it's always c.


Not disagreeing with c, but I think I would take the advice of several random internet commentators over the cheerleaders at CNBC.
 
2014-01-31 10:01:12 AM
It's still slightly less than Netflix, I believe (currently).
 
2014-01-31 10:08:32 AM
I use it to order janitorial and office supplies for work. It would have to get alot more expensive before it became not worth it.
 
2014-01-31 10:38:19 AM

Nemo's Brother: I typically order in bulk in Amazon, so I get free shipping anyway.


It's not just free shipping, it's free 2-day shipping with Saturday delivery plus a typically cheap overnight option if you need it.

The service is completely based around convenience and not wanting to wait or deal with a brick and mortar. Completely worth it to me and I'd still get it at $119, but if they go that high I imagine they'll split it into 6 month subscriptions. People will swallow $60 twice a year easier than $120 annually.
 
2014-01-31 11:39:21 AM
It's the establish market share, then fark the customer model. It only happens always all the time. The only problem is Walmart is going nowhere.
 
2014-01-31 11:42:45 AM
Somehow, someway, I'm still registered as Amazon Prime Student membership, charging me $39. I just checked, my membership will renew in May at $39.

Quite the bargain, if you ask me.
 
2014-01-31 11:46:43 AM
I'm confused about the article too, since I pay $79/yr for Prime. I have it just for the shipping, I don't care about the streaming since 1) I don't watch much TV and 2) my connection sucks anyway "out here". If they were to break Prime up into Prime and SubPrime and SubPrime Prime, where SubPrime  would just be free shipping and SubPrime Prime was just free streaming, I bet that people would use those options, I'd just get SubPrime.  In addition, their attempt to save on shipping costs by using "smart post" is totally failing, items never arrive here in the 2 day window and I call them and complain and use up their staff time.
 
2014-01-31 12:01:15 PM

AngryDragon: $10 bucks a month for free streaming and free shipping on everything I purchase?

Deal.


blog.angelatung.com

..for only $1, I can get a McChicken sandwich from McD's for free.
 
2014-01-31 12:33:41 PM
I've been trying to decide if I want to keep Prime or not, my free trial ends next week.

The streaming library seems pretty shiatty for selection, a bunch of movies I've never heard of and don't really have any interest in watching. I have a Nook and not a Kindle, so I can't take advantage of the book lending. I think I can get a browser plug-in that'll let me read Kindle books on my computer, but I don't really want to read at my desk. So that leaves shipping.

About half of the stuff I order is eligible, and of that half it seems about 5 dollars is added into the price. I can buy a thing for 5 bucks and pay 5 shipping, or pay 10 from a Prime eligible seller. Amazon's prices aren't any better than Best Buy or Newegg, and as of now'ish there's state sales tax being applied for my state. So as far as I can tell the only real benefit is 2 day delivery over 4, and not having to wait and order $X to get free shipping.

If I have Prime I'll use Amazon for the majority of my purchases, but if I don't it makes a lot less sense to do so and will therefore spread the wealth around between their online competitors, big box stores who are increasingly offering free shipping (though at a slower speed, generally), and actual IRL brick and mortar store purchases. If Amazon is only making a "little" profit off Prime they're sort of shooting themselves in the foot by raising the price, as Prime tends to lock you into buying crap from Amazon. If it's costing them money then it may make sense to raise the price.

But sure Amazon, go ahead and make it more expensive. That's surely not going to impact a service of questionable value to the consumer that benefits you by virtually guaranteeing future purchases from your company.
 
2014-01-31 02:44:36 PM

epyonyx: It's still slightly less than Netflix, I believe (currently).


Amazon: $79/year, $6.58/month
Netflix: $95.88/year, $7.99/month (for their cheapest streaming plan)

So even if Amazon raises it to $99/year it's still basically the same price as Netflix, plus you get all the other assorted Prime benefits.
 
2014-01-31 02:45:00 PM
the wife and i are ordering something like 2500 dollars worth of goods this spring alone. total shipping is gonna be to the tune of 4x the cost of amazon prime, all told(heavy items, long distance, and many many different shipping rates).

but getting it all on two-day shipping, for free, with access to a really big library of content?

hells tothe yeah
 
2014-01-31 02:46:38 PM

Eddie Ate Dynamite: I've been trying to decide if I want to keep Prime or not, my free trial ends next week.

The streaming library seems pretty shiatty for selection, a bunch of movies I've never heard of and don't really have any interest in watching. I have a Nook and not a Kindle, so I can't take advantage of the book lending. I think I can get a browser plug-in that'll let me read Kindle books on my computer, but I don't really want to read at my desk. So that leaves shipping.

About half of the stuff I order is eligible, and of that half it seems about 5 dollars is added into the price. I can buy a thing for 5 bucks and pay 5 shipping, or pay 10 from a Prime eligible seller. Amazon's prices aren't any better than Best Buy or Newegg, and as of now'ish there's state sales tax being applied for my state. So as far as I can tell the only real benefit is 2 day delivery over 4, and not having to wait and order $X to get free shipping.

If I have Prime I'll use Amazon for the majority of my purchases, but if I don't it makes a lot less sense to do so and will therefore spread the wealth around between their online competitors, big box stores who are increasingly offering free shipping (though at a slower speed, generally), and actual IRL brick and mortar store purchases. If Amazon is only making a "little" profit off Prime they're sort of shooting themselves in the foot by raising the price, as Prime tends to lock you into buying crap from Amazon. If it's costing them money then it may make sense to raise the price.

But sure Amazon, go ahead and make it more expensive. That's surely not going to impact a service of questionable value to the consumer that benefits you by virtually guaranteeing future purchases from your company.


Except you are a data point, and irrelevant on your own (and your $80 per year membership plus you purchases are also negligible, not even worthy of being considered a rounding error).

If other people are getting more value out of Prime and stay it may well be worth dumping you.

If they increase price $20 and one of every five subscriber dumps it (one of every three for a $40 increase), then they break even on subscriptions (technically they come out ahead by reducing admin costs).

More relevant is the lost sales, but it is likely the lower volume purchasers are the ones who leave and will continue purchasing some goods through Amazon. It is impossible to do any actual estimates.

I am sure Amazon has plenty of numbers being crunched on the impact on subscriptions, sales, costs, etc. And it may not even be completely wrong. But they probably have a better idea than a random guy on the internet.
 
2014-01-31 02:51:12 PM

dywed88: Eddie Ate Dynamite: I've been trying to decide if I want to keep Prime or not, my free trial ends next week.

The streaming library seems pretty shiatty for selection, a bunch of movies I've never heard of and don't really have any interest in watching. I have a Nook and not a Kindle, so I can't take advantage of the book lending. I think I can get a browser plug-in that'll let me read Kindle books on my computer, but I don't really want to read at my desk. So that leaves shipping.

About half of the stuff I order is eligible, and of that half it seems about 5 dollars is added into the price. I can buy a thing for 5 bucks and pay 5 shipping, or pay 10 from a Prime eligible seller. Amazon's prices aren't any better than Best Buy or Newegg, and as of now'ish there's state sales tax being applied for my state. So as far as I can tell the only real benefit is 2 day delivery over 4, and not having to wait and order $X to get free shipping.

If I have Prime I'll use Amazon for the majority of my purchases, but if I don't it makes a lot less sense to do so and will therefore spread the wealth around between their online competitors, big box stores who are increasingly offering free shipping (though at a slower speed, generally), and actual IRL brick and mortar store purchases. If Amazon is only making a "little" profit off Prime they're sort of shooting themselves in the foot by raising the price, as Prime tends to lock you into buying crap from Amazon. If it's costing them money then it may make sense to raise the price.

But sure Amazon, go ahead and make it more expensive. That's surely not going to impact a service of questionable value to the consumer that benefits you by virtually guaranteeing future purchases from your company.

Except you are a data point, and irrelevant on your own (and your $80 per year membership plus you purchases are also negligible, not even worthy of being considered a rounding error).

If other people are getting more value out of Prime and stay it may well be worth dumping you.

If they increase price $20 and one of every five subscriber dumps it (one of every three for a $40 increase), then they break even on subscriptions (technically they come out ahead by reducing admin costs).

More relevant is the lost sales, but it is likely the lower volume purchasers are the ones who leave and will continue purchasing some goods through Amazon. It is impossible to do any actual estimates.

I am sure Amazon has plenty of numbers being crunched on the impact on subscriptions, sales, costs, etc. And it may not even be completely wrong. But they probably have a better idea than a random guy on the internet.


Forgot to conclude,

Yes it is healthy to be skeptical of this and its final impact on Amazon.

But I don't see anything that warrants doom and gloom at this time. Especially as they seem to be putting thei service on a parity or slight premium to Netflix while offering additional benefits.
 
2014-01-31 02:52:18 PM
I signed up for Prime in November for the free month with the initial plan to cancel it before billing started.  Ended up keeping it.

And I abuse the shiat out of it at times.  I went from wish listing items until I had enough to get free super saver shipping to just ordering crap at random one thing at a time.  I imagine millions of customers doing this would play hell with their profit margins.
 
2014-01-31 03:00:23 PM

GrailOfThunder: epyonyx: It's still slightly less than Netflix, I believe (currently).

Amazon: $79/year, $6.58/month
Netflix: $95.88/year, $7.99/month (for their cheapest streaming plan)

So even if Amazon raises it to $99/year it's still basically the same price as Netflix, plus you get all the other assorted Prime benefits.


Despite this being true, I think Amazon may suffer from consumer expectations. They won't all think "Gee this gives me more value for money than Netflix", or "Wow this streaming library has gotten huge and they have original content now!", or equate it to the 79 shipping I paid for in 2009 and only $20 for a streaming library.

At least some will say "That's about a 25% increase for the same thing". And now that several states charge tax on Amazon goods, while that by itself doesn't discourage folks, add in the prime cost going up and some customers might hit their tipping point.

This is being leaked as a rumor on purpose, to gauge consumer interest and reaction. I sort of hope they get a huge backlash so that it stays the same, because $20 won't break my bank every year.   If they actually went the +$40 route though, I think they'd really be in trouble.
 
2014-01-31 03:07:23 PM
One of the benefits of prime is that other Amazon merchants (not the 'fulfilled by Amazon ones') offer free shipping to compete.  Sure, sometimes its not two day shipping, But it it matches the 'free shipping on orders of $25  $30 rate'

(A netbook battery I just ordered from such a merchant was estimated to arrive 2/4/14.  It got here yesterday with 2day USPS shipping.  A day before the shortest estimate in Amazon's window.  (It was the confirm email that pegged it to the 4th)

What gripes me is the surge of "Add-on only" items.  The price window for these seems to be trending upwards.   Eventually Amazon Prime may as well be "Free shipping on orders over $30".  Then what is it worth a year?
 
Displayed 50 of 63 comments

First | « | 1 | 2 | » | Last | Show all

View Voting Results: Smartest and Funniest


This thread is closed to new comments.

Continue Farking
Submit a Link »






Report