Amazon has chosen to increase the price of Amazon Prime memberships after reporting a huge quarterly profit.
A huge boost in Amazon online sales and demand for their cloud web services has led to massive first-quarter profits for the company, Bloomberg reports. The company’s profits were triple what many analysts had predicted as Amazon’s retail profits soared, their cloud computing services remained extremely popular, and their video services increased in demand — with the company’s Alexa smart speaker system’s remaining extremely popular.
Amazon’s sales saw an overall increase of 43 percent compared to last year, reaching $51 billion. The company’s net income was approximately $1.6 billion. Amazon’s share prices increased by 7 percent following the release of the quarterly earnings, the company has seen a stock price increase of 30 percent over the past year. Despite these impressive numbers, Amazon has still chosen to increase the price of their Amazon Prime membership for new and existing customers.
CFO Brian Olsavsky stated during Amazon’s quarterly earnings call with investors on Thursday that the new price of Amazon Prime will be $119 and will go into effect for new customers on May 11. Existing Prime members will be charged the higher price beginning June 16. “The value of Prime to customers has never been greater,” Olsavsky stated. “And the cost is also high, as we pointed out especially with shipping options and digital benefits, we continue to see rises in costs.”
Olavsky noted that one of the reasons for the Prime membership price increase was the larger number of items eligible for two-day and same-day delivery, saying that Prime “is much different than it was in 2014.” Amazon announced last week that the company has approximately 100 million Prime subscribers worldwide. Research firm eMarketer has estimated that Amazon controls approximately 43 cents of every dollar spent online.