There is an assumption that in addition to predictable, two-day shipping, Prime customers end up saving money vs. non-Prime members, with the membership fees often compared to the fees customers pay to join warehouse clubs that offer bulk discounts. But CNET took a look at a number of products and found that isn't always the case.
In some cases, certain products under Prime actually cost more than their non-Prime counterpart, with the shipping fees baked in. For example, the PlayStation 4 dual shock wireless controller costs $59.96 through Prime. A non-Prime seller had the same item listed for $52.32 with a $3.99 shipping cost, bringing the total to $56.22. The difference is mere dollars, but that might be enough to sway shoppers.
"I spend fairly large amounts at Amazon but I was even starting to wonder if $79 was a reasonable price," one customer wrote in an Amazon forum post about the fee increase. "I have noticed that a large number of Prime items seem to cost more already...This last year, more of the stores I encounter locally and online have lower prices."
Amazon Prime is an important part of the company's plans for revenue growth on its retail side. Most of Amazon's products and services, from the Kindle Fire tablets to its video streaming service, are designed to drive customers to Prime, which in turn will spark a higher frequency of online shopping on it site. As a result, it has had to be sensitive about raising the fees on the service.
Any members who sign up after Thursday will have to pay the new $99 per year membership fee. Any existing members who renew their memberships after Thursday will also pay the new fee (so if it's almost time for you to renew, you might want to renew early to lock in the old $79 price for the next year).
The membership provides unlimited two-day shipping on 20 million Prime-eligible products as well as unlimited access to Prime video streaming and the Kindle e-book lending library. While Amazon says the hike will help cover rising transportation costs, it has also had the unintentional effect of causing some to pause and re-consider its value. But, most members seem fixated on shipping and not the other perks.
"I set my iCal reminders for two weeks prior to expiration to 'END AMAZON PRIME MEMBERSHIP,'" another customer wrote in Amazon's customer forums. "This increase is a joke. Drone package deliveries, your own TV series, well, I don't want to pay for it. I buy mostly camera gear, and B&H has free shipping and great promotions without charging $99 a year. Thank you for waking me up."
Amazon, for its part, believes the value of Prime shipping is on reliably knowing when a product will arrive at your doorstep. The primary benefit isn't in price, but the two-day delivery.
"The comparison is only relevant if you include two-day shipping on both purchases because Prime is a shipping service, not a pricing program. Otherwise, you are comparing apples to oranges," Amazon spokeswoman Julie Law said.
Shoppers who don't pay for Prime can still get free standard shipping on Prime-eligible items, but they have to buy $35 worth of items, and it is delivered in three to five days. Those who can't stomach the fee increase will just have to wait a bit longer for their goods to arrive.
The other products on Amazon are sold and shipped by third-party merchants on the Amazon Marketplace, a way to sell items that is similar to eBay. These sellers set their own prices, ones that Amazon says its tries to beat. But, Amazon is not trying to hide that some non-Prime items are cheaper.
Law pointed to a Dirt Devil vacuum cleaner filter listing that has includes a note that reads, "This item may be available at a lower price from other sellers that are not eligible for Amazon Prime."
"I know it's complex, that's why we try really to make it transparent as possible for the customers," Law said. Not all items that have cheaper counterparts have this note, though.
CNET did a few comparisons and found that while Prime products were more expensive in some of Amazon's top selling categories, there were also some categories where Prime products were the much cheaper options.
To do the comparisons, we checked the price of Prime-eligible products versus those non-Prime products that are also listed for sale. We used items from Amazon's top selling products categories: toys, electronics, camera and photo, video games, books, and clothing. We also tested out household products because it's an area Amazon has been focused on. Household items, like laundry detergent or toothpaste, require frequent replenishing and encourage repeat purchases.
To get a sampling, we picked five items from each category and made two separate shopping carts, Prime and non-Prime with identical items. It's important to note that Amazon's prices are dynamic, and change so frequently that some of these items may actually cost less or more now, compared to when the comparisons were conducted
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