The price hike comes as inflation hit a nearly 40-year high in 2021. Amazon reported high earnings in 2021, with net sales increasing 9% during the fourth quarter of 2021, reaching $137.4 billion (that’s compared to $125.6 billion during the same three-month period in 2020). The e-commerce giant has seen significant benefits from the pandemic with more Americans ordering items to be delivered to their homes.
Amazon’s Prime membership program has also been key to its success as it has built out its own robust delivery fleet. Prime, which includes free shipping for members, has prompted other major retailers to create their own membership programs with similar perks and annual fees. Walmart introduced its Walmart+ program during the height of COVID-19 restrictions, and the company removed its $35 shipping minimum for orders at the end of 2020, increasing its competitive edge with Amazon. Walmart+ members receive free next-day and two-day shipping on items shipped by the retailer, no matter the basket total. Grocery orders still carry a $35 minimum order.
New Prime members will see the new annual price tag starting Feb. 18, and the higher cost could potentially steer some away toward the emerging alternative programs from competitors. Amazon had not increased the Prime membership cost since 2018, when the cost jumped from $99 to $119. The price hike news was revealed on the company’s latest earnings call.
In other Amazon news, the retailer also revealed this week that it is increasing its base salary cap for white-collar workers by more than 100%, from $160,000 to $350,000.