It seems at least a little confusing that Amazon would even consider raising the yearly subscription cost of their Amazon Prime business members after perhaps the most successful year they have ever had in terms of items shipped (2013).
Amazon is all too leery to share a lot of important data about Prime Member subscriptions and other financial aspects of how well they are doing. It seems as though they only report the aspects of their financial wins, and not their losses. And while Amazon secured roughly a million new subscribers during the 2013 holiday season, they probably could have done better by offering up something like free overnight shipping for the $80 they charge for Prime service.
Amazon stock was up by 30 percent in 2013, but the company itself was not more profitable in terms of actual items shipped. Amazon shareholders could easily jump ship based on the forecast which suggests that less and less people are likely to continue to sign up for Prime when they can easily and predictably get the items they order in just two or three days anyway. So where is the consumer’s incentive to sign up for Prime memberships when it essentially offers the same delivery times on fulfillment it does for non-Prime shoppers?
Financial analysts don’t find it coincidental that Amazon raised the price of Prime memberships for small and medium-sized businesses went up by $10 dollars. Raising prices could mean huge losses for Amazon over time, and the question for consumers as well as merchants who use Amazon to buy and to fulfill orders is, why punish them with price hikes when they say things are going so well and their stock prices reflect this?
There has to be something to this story that Amazon is not telling the media, and so far, nothing has really leaked yet. Meanwhile, economists looking at the scenario who are putting together the pieces are making likely accurate assumptions. To wit, raising prices when the company has branded itself around the ideal of offering up the best way to get what we want online in a timely and cost effective manner seems incongruous.
Other online companies that offer similar services like streaming video and availability to media and content have gone down this road in the recent past, and not with overall good results. Losing tens of thousands of customers because of raising prices, Netflix is now revamping their prices by offering up a menu of prices rather than just one straightforward hiked price. It could be very likely that Amazon will go down a similar path, offering up a variety of prices for a wider number of options for buyers and sellers alike. Whether or not they will become flexible in this way has yet to be seen or even discussed, but it would very likely be a way to do some front loaded damage control.
The last thing Amazon wants to do is ostracize those who use their colnossal fulfillment ability to sell and move their goods. Small time merchants have many other ways to move the mail, including the groundbreaking FriendShippr app and other peer-to-peer delivery options. The end game will hopefully prove to be something beneficial for buyers and sellers, and something that won’t make Amazon.com jump the shark. They’ll have to come up with some more progressive and inviting way to make the world of buying and shipping an enjoyable experience rather than just a tolerable one.