/// Amazon Optimus Prime

March 12, 2013  |  All Things Digital

How many Amazon customers subscribe to the company’s Prime service, a $79 yearly membership program that offers free two-day shipping on eligible orders, along with unlimited movie and TV streaming via Amazon Instant Video? The tightlipped retailer won’t say. But according to some new research from Consumer Intelligence Research Partners (CIRP) and Morningstar, Amazon’s Prime subscribers number more than 10 million. That’s at least double the number of Prime members Amazon had a little over year ago. Great news for the retailer, since Prime subscribers purchase far more from it than the typical consumer. Prime members spend about twice as much annually as non-Prime members — about $1,200 (excluding the $79 Prime membership fee). More importantly, they make most of their online purchases at Amazon. Accounting for cost of sales, shipping, marketing, technology, etc., CIRP and Morningstar figure Amazon made about $78 per Prime subscriber last year. In other words, that $79 annual Prime fee is almost entirely profit. Not bad. Particularly since the research firms expect Prime membership to reach nearly 25 million by the end of 2017. And there’s more upside to that spike in membership than just the $78-per-subscriber profit Amazon’s reportedly collecting here. For one thing, Prime members have little reason to shop elsewhere for anything they don’t need immediately.

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Amazon Optimus Prime

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