Amazon hikes fees for Prime monthly users

Amazon.com is looking to squeeze more money out of monthly subscribers to its free two-day shipping service, which could persuade many of them to sign up for annual subscriptions.

Monthly subscribers to Amazon Prime now have to pay $12.99 each month, an 18 percent jump, according to Amazon’s website. At that rate, monthly customers would pay $156 a year.

Being a Prime member gives consumers free two-day shipping as well as same-day delivery and access to Amazon’s media services, including Prime Video and music streaming. Combining these benefits helps turn casual Amazon shoppers into devotees of the e-commerce platform.

The price increase makes the $99 annual membership — which does not face a price increase — seem like a bargain. Amazon doesn’t provide membership numbers or break down the share of monthly vs. annual subscribers. But it’s clear that Prime is the backbone of Amazon’s e-commerce engine and it’s being forced to carry ever more weight.

Cowen and Co. analyst John Blackledge estimated this month that Amazon ended 2017 with about 60 million Prime subscribers in the U.S. He said consumers with Prime memberships now make up about 65 percent of all purchases, compared with 57 percent in December of 2016.

This means that Amazon is eating the cost of free shipping for many more orders.

Amazon doubled the number of items eligible for its free twoday shipping benefit to 100 million and shipped more than 5 billion items to Prime members in 2017.