The cost of an Amazon Prime membership could potentially rise next year, according to Wall Street analysts.
J.P.Morgan analyst Doug Anmuth said last week in a research note that the bank thinks the Seattle-based e-commerce giant could raise the price of its popular Amazon Prime membership in 2026.
Amazon has charged an annual fee of $139 for its Prime membership in the U.S. since 2022. Before that, it cost $119 a year.
Setting a higher price for it next year would be “consistent with its cadence of raising the price every ~4 years,” the J.P.Morgan research note said.
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Prime memberships provide subscribers with free same-day, one-day and two-day shipping on many products, along with access to Prime Video, Amazon Music, Prime Reading, and discounts at Whole Foods and Amazon Fresh.
Anmuth said the value of the various aspects of a Prime membership make the subscription worth about $1,430 per year, an estimate that is “~10x the $139 annual Prime subscription cost, +6% from our estimated value of ~$1,345 in 2024, & more than double the $544 value in 2016.”
The e-commerce giant has been introducing new benefits and “scaling existing offerings” for Amazon Prime in recent years, making it increasingly more valuable, according to the J.P.Morgan analyst.
Anmuth highlighted Amazon’s expansion of its fulfillment network and last-mile transport network, as well as an increased emphasis on “regionalized fulfillment infrastructure” and other initiatives when it comes to logistics.
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The research note also mentioned Prime’s grocery benefits, complimentary Grubhub+ memberships for U.S. users, new shopping features and the investments the company has been making in its video streaming service.
Amazon and GrubHub started making a free GrubHub+ membership available to Prime subscribers in the U.S. “as an ongoing offer” in May of last year, even giving them the ability to place orders through Amazon’s website and app.
Prime “is a key driver of the Amazon flywheel and helps Amazon build a loyal customer base,” according to the J.P.Morgan analyst.
In the note, Anmuth suggested a Prime price hike of $20 in the U.S. could bring Amazon a roughly $3 billion boost in “incremental annualized Net sales.”
He also indicated J.P.Morgan doesn’t think an increase in the price next year would cause “significant churn” or negatively impact membership growth.
This year, the bank estimated Prime’s membership count will hit roughly 350 million, with international markets offering “strong growth opportunity” in the future.
Amazon first started offering Prime memberships in 2005, about a decade after the company was first founded by Jeff Bezos.
The e-commerce giant had a market capitalization of over $2.3 trillion as of Monday, making it one of the most valuable companies in the world.
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