Amazon is raising its annual prime fee from $99 to $119 beginning May 11, the company told investors while reporting first quarter earnings Thursday.
“There’s all kinds of new features that we’ve continually added to the Prime program,” Brian Olsavsky, Amazon’s chief financial officer, told investors Thursday, noting customers can now get products within two hours. “It’s much different than it was in 2014. This is a reflection of that — a better reflection of the cost value of the program.”
New annual Amazon Prime subscribers will pay $119 a year for the membership program, a $20 increase from $99, beginning May 11. The new annual fee will apply to membership renewals beginning June 16.
The fee hike comes a week after Jeff Bezos told shareholders that Amazon’s Prime program now includes more than 100 million members. Amazon increased its Prime monthly fee from $10.99 to $12.99 in January. This is the first time in four years that Amazon has raised the price of annual Prime membership.
Olsavsky told investors on the call that Amazon’s Prime service has grown exponentially since the company first launched it. Prime members can now get more than 100 million products through free two-day shipping compared to 20 million in 2014. The cost of two-hour shipping and delivery from Whole Foods stores also informed Amazon’s decision to increase price, he noted.
Amazon Prime continues to juice company profits. Sales from subscription services, which include Prime, were $3.1 billion in the company’s first quarter — a 56% increase from the same time last year.
Amazon Web Services is also proving quite…