Pros and Cons of Amazon Prime
A decade ago, Amazon Prime debuted as a membership service that offered fast, free shipping. While two-day delivery remains the cornerstone of the $99-a-year service, the e-commerce juggernaut now provides buffet-style access to thousands of free TV shows, movies, music, and hundreds of thousands of e-books (for Kindle owners) as well as unlimited cloud storage for photos.
Members also get 30-minute early access to Lightning Deals on Amazon, and can shop on MyHabit.com 30 minutes before other customers for things such as designer duds from the likes of Burberry, Fendi, and Hermès. There are periodic teasers, too, including Prime Day, a one-day, members-only global shopping event last June that touted more deals than on Black Friday.
Then there's the latest perk, Prime Now, an app-enabled service that offers shoppers in 16 metropolitan areas ultra-quick delivery. If you want, say, paper towels or a container of milk, you can get it in an hour for $7.99 per order or in two hours for free. The service is available for tens of thousands of items, including television sets and Kindles. In some locales, you can even browse menus of participating restaurants, place orders, track the status of a delivery, and watch as the driver travels from the restaurant to the delivery address in real time.
So what's to complain about? Actually, not much. But if you don't care about streaming services and photo storage, and enjoy paperbacks more than e-books, you're paying for benefits you'll never use. If you routinely spend at least $35 per order, Amazon offers free, albeit slower, delivery. If you don't shop online enough, a Prime membership could end up being pretty expensive—the more you shop, the more economical the membership fee becomes. Amazon Prime might also be a disappointment if you mostly do business with independent third-party vendors that operate out of the Amazon Marketplace. Many of those purchases are not fulfilled by Amazon and, thus, not eligible for free Prime shipping.
Plenty of Benefits
Even so, Amazon Prime offers plenty of benefits, and consumers have been quick to sign up. While hard numbers are difficult to come by, the company acknowledges that there are “tens of millions” of Prime members and Prime shoppers spend almost double the amount on Amazon than non-Prime members, according to research by RBC Capital Markets. Those results are reflected in the company's third-quarter sales. For the quarter ending in September 2015, Amazon brought in revenues of $25.4 billion, up 23 percent from the same period a year ago.
Amazon Prime Benefits
For most people, the linchpin of Prime is swift package delivery, so it's easy to understand why Amazon makes other shipping options less attractive. If you're a non-Prime member and your order qualities for free freight because you've met the $35 purchase minimum, you might have to wait as long as eight days for your package to arrive. By contrast, "standard" shipping, the default delivery method for non-Prime members that carries a nominal charge, usually takes four to five business days. Those extra few days could be a deal breaker during the peak holiday season, when delays are common because of high package volume.
Among the key benefits you can enjoy as an Amazon Prime member:
• Free two-day shipping on eligible items to addresses in all states, except Alaska and Hawaii.
• Free same-day delivery in eligible ZIP codes.
• Prime Instant Video: Unlimited streaming of movies and TV episodes.
• Prime Music: Unlimited, advertising-free access to hundreds of Prime Playlists and more than a million songs.
• Prime Photos: Secure, unlimited photo storage in Amazon Cloud Drive.
• Prime Pantry: You can buy low-priced grocery, household, and pet care items. Shipping costs $5.99 for each Prime Pantry box. (Prime Pantry boxes cannot be shipped to Alaska or Hawaii, P.O. boxes, or Amazon Lockers.)
• Prime Early Access: 30-minute early access to Lightning Deals on Amazon.com and new events on MyHabit.com.
• Kindle Owners' Lending Library: Access to more than 800,000 e-book titles.
• Kindle First: Download access to a new book for free every month from the Kindle First picks.
• Deals and Discounts, Compliments of Amazon Mom: These include 20 percent off diapers through Subscribe & Save and 15 percent off eligible products from your baby registry.
• Membership Sharing: Two adults living in the same household can create an Amazon Household to share certain Amazon Prime benefits.
If you’re unsure about how much shopping you'll be doing over the holiday season, you can sign up for a free, 30-day trial for Amazon Prime. But beware: At the end of the free trial (or annual membership period if you're already a member), your credit card will be charged the $99 annual membership fee automatically for the next period unless you cancel in advance. If you paid the fee and haven't placed an Amazon Prime-eligible order, however, you still qualify for a full refund.
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