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Is Amazon Prime Worth It? Print E-mail
(22 votes, average 3.23 out of 5)
Shopping - Online
Written by Omie Ismail   
Tuesday, 01 December 2009 03:40

Amazon Prime costs $79 a year and it allows you to get free two-day Fedex shipping on all of your products at no additional cost. In addition, members can get $3.99 next day shipping per item which is great for last minute shopping. But does it really make sense to pony up nearly $80 for free shipping? We answer the question "Is Amazon Prime Worth It?"

After having Amazon Prime for a couple years, I decided to cancel my membership. Its not that I didn't use it, I used it a ton. During the last year, I probably used it 25 to 30 times, which would make you think that it would be a no-brainer for renewal. But it wasn't.

Amazon Prime Benefits:

1) Prime allows you to buy something at the last minute and still have it show up on time. I have to admit, I tend to buy presents right before holidays or birthdays. A few times, I even needed to use the next day option to make it there on time. At a cost of only $3.99 for next day delivery, these last minute orders would have cost me far more than the Prime membership fee.

2) Essentially, when you subscribe to Prime, it eliminates thinking about the cost of shipping from the analysis. Since there are no sales taxes, the price that is listed is the price that you pay. Far easier to do comparison shopping without having to calculate the shipping charges. So I found that I made purchasing decisions much faster.

You'd think that that would make it a slam dunk for someone like me, but obviously, I didn't renew, and here's why:

Amazon Prime Negatives:

1) Almost every item that I would buy had a free shipping option. Sure it was the Super Saver shipping, but where I live in Southern California, it only takes a few days. The fact that Amazon offers free shipping to non-members devalued my Prime membership. Every time I would see this, I felt like Amazon had duped me into a paying for a service that is essentially free to customers who don't subscribe to Prime when they spend $25. Technically, they are not the same, but where I live, I get my Amazon stuff in 1 to 3 days.

2) Prime doesn't apply to non-Amazon purchases. Many times, the lowest price or the only available merchandise is from a third party vendor. On several occasions, I bought something where my Prime membership was worthless. I still needed to pay for the shipping from the vendor and that seemed awkward, because as far as I was concerned, I was buying it from Amazon.com. Yes, it is a third party merchant, but it is being brokered by Amazon and Amazon is making a good cut of the sale.

3) After my experience with the non-Prime purchases, I found myself looking only at the Prime eligible items. Invariably, many of the Prime items carried a higher price tag than partner vendors especially at low price points. Items that were $8 from most other vendors were $13 through Amazon.com. So I would get free 2-day shipping, but it was embedded in the price. Considering that I'd already paid for the shipping advantage by subscribing to Prime, it felt like I was taking money from one pocket and putting it in another.

4) Amazon Prime narrowed my comparison shopping. I used to look at several sites before buying, but once I had Prime, I felt like I needed to leverage my investment. That's exactly what Amazon was likely hoping for and it worked extremely well. But often, I noticed that other vendors had lower pricing and even after factoring in the savings on shipping, Prime was costing me more.

I determined that Prime no longer made sense for me. If you're like most consumers and buy significantly less than 20-25 purchases a year from Amazon, it's likely not worth it. Maybe if you are in a faraway place away from one of Amazon's warehouses, it might also make sense. But if you are in a major metro, just hit that magic $25 minimum, and wait the 3 to 5 days for your purchase to show up. Having said that, if convenience is your primary goal and you have to have something in 2 days, Prime still makes a ton of sense.

Update! Amazon Prime Streaming

Amazon now gives you unlimited free streaming of about 5,000 movies and TV shows. While the selection is not as extensive as Netflix it does provide additional value for those that don't already have Netflix. Enough value for me to get Prime? Not yet, but if they had a more extensive library, it would become a no-brainer.

Note: After receiving comments about sharing Amazon Prime, I did some research and wrote:

Split the Cost of Amazon Prime and Save?

Update: Since dropping Prime, I have had the following experiences with shipped packages. Package #1: Book - Received 1 day after order. Packaged #2,#3: Various gifts - received 2 days after order. Package #4 gifts shipped to rural area - received 3 days after order. Package #5 gifts shipped to rural area - received 4 days after order. Package #6 - Book Received 3 days after order. Note: for all of these shipments Amazon quoted shipping dates that were after the date that I actually received the packages.

So my experience since then only supports my decision with the exception that if I wanted to ship to a rural area and get it there in two days, I would want Prime. Amazon's regular shipping is just incredible, being able to get a book in 1 day for free shows how good they are operationally. It also means that the value of their 2-day service at $79 is much less.

Use Amazon Prime? What has your experience been?

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