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It’s something to think about at a time when just about everything is going.
Many people rely on Amazon Prime for everything from gifts to school supplies to household essentials. But a Prime membership, although valuable in its own right, isn’t cheap these days.
In 2022, Amazon raised the cost of an annual Prime membership from $119 to $139. And that bump was enough to cause some members to jump ship.
If you stuck with Amazon through its most recent fee hike, you may be maxed out on what you’re willing to pay for a Prime membership. But how soon will you face another fee hike again? Will Amazon seek to raise its prices in 2023?
A possibility to brace for
Many retailers have seen their margins get tighter as a result of inflation. And there’s no reason to think that Amazon is an exception. As such, it’s conceivable that the online retail giant might seek to raise the cost of a Prime membership despite having recently gone that same route.
That said, a fee hike two years in a row isn’t likely to sit well with Prime members. And Amazon knows full well that its Prime program isn’t the only service consumers can sign up for that comes with perks like free shipping.
Walmart+, for example, offers that same benefit — and at a lower price point than a current Prime membership. So it’s in Amazon’s best interest to try to retain Prime members, rather than drive them away with fee hikes.
Expect the cost of Prime to rise eventually
Amazon may not increase the cost of a Prime membership in 2023 due to having done so in 2022. But that doesn’t mean the cost of Prime won’t increase at some point. If it doesn’t happen this year, for example, it could go up in 2024. That’s why it’s a good idea to continuously assess your Prime membership and make sure you’re really getting great value out of it.
If you use Amazon Prime multiple times a week to order goods at a discount, then chances are, a Prime membership will be worth keeping even if it costs you $10, $15, or $20 more than it does today. But if you only place Prime orders on occasion, then it may not be worth it to keep your membership — especially if that becomes a more expensive prospect.
In fact, you actually shouldn’t wait for an Amazon Prime fee hike to evaluate your membership. Rather, ask yourself every few months if Prime is worth paying for. If not, cancel and use that money for something else, whether it’s paying for groceries or padding your savings account.
There are lots of benefits Amazon Prime members get to enjoy, from the option to try on apparel at no cost to loads of digital content. But if you find that you’re just not taking advantage of them, then there’s no sense in spending money on something that only offers you mediocre value.
Amazon might actually keep the cost of an annual Prime membership at $139 for quite some time. But that doesn’t automatically make it a good deal for you.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon.com. The Motley Fool has positions in and recommends Amazon.com. The Motley Fool has a disclosure policy.