Amazon Prime said to be huge success with more than 10 million members

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Amazon’s (AMZN) Prime service is one of the Internet’s hidden gems. For $79 a year, the company offers Prime members free two-day shipping and access to thousands of streaming TV shows and movies. For frequent online shoppers, Prime is a no-brainer. While Amazon has never disclosed how many people have signed up for Prime, recent estimates suggest the service is quite successful.

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Morningstar analyst R.J. Hottovy claims the service is used by more than 10 million members and could contribute roughly a third of Amazon’s operating income, Business Insider reported. A survey of Amazon shoppers revealed that Prime members account for only 4% of Amazon’s 182 million active customers, however they account for nearly 10% of all purchases and spend twice as much as non-Prime customers.

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The analyst found that after licensing and shipping fees, Amazon made about $78 per Prime member in 2012. Hottovy estimates that the service could grow to 25 million users by 2017 and contribute for between $3.2 billion to $9.6 billion in incremental operating profits.


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