Amazon is increasing the price of Prime for most members (AMZN)

amazon warehouse worker

Amazon said on an earnings call it will increase the price on annual Prime memberships to $119 a year.
CEO Jeff Bezos recently revealed the number of Prime members at over 100 million members.
Amazon continues to offer discounts for students and some lower income demographics.

Amazon says it will increase the price of its annual Amazon Prime membership program to $119 a year — an increase of $20.

The company's CFO, Brian Olsavsky, revealed the price increase on an earnings call discussing the company's latest results. The price increase will take effect May 11 and will affect Prime membership renewals after June 16.

"We still feel its the best deal in retail," Olsavsky said on the call after an analyst questioned the price increase.

Olsavsky pointed to the increased benefits of Prime — including tens of millions more items eligbile for Prime shipping — and the increased costs of fufilling these benefits for customers as justification for the increase.

Amazon recently increased the price of its monthly Prime membership in January from $10.99 to $12.99 per month. Consumer Intelligence Research Partners estimated last year that only about 19% of Prime members pay monthly.

In his latest letter to shareholders, Amazon CEO Jeff Bezos shared that Prime has more than 100 million subscribers globally.

This is the first time that Amazon has revealed just how many people pay for Prime. Estimates from analysts pegged it at about 90 million as recently as last year.

Bezos went on to explain how much Prime has expanded since it was founded 13 years ago. The membership now includes one-day and same-day shipping as well as the classic two-day shipping. Those benefits added up to a lot of packages — five billion items were shipped with Amazon Prime in 2017.

Not everyone has to pay full price for Prime. Amazon has been offering discounts for holders of EBT cards since June. EBT stands for Electronic Benefit Transfer, and these debit cards are the primary way that recipients of SNAP — otherwise known as food stamps — get their benefits. Amazon now offers the discount to Medicaid recipients as well. Amazon also offers discounts for students after their free trial period.

The discount is substantial: Amazon asks these lower-income customers to pay $6 a month, and there is no annual membership option for discounted.

Join the conversation about this story »

NOW WATCH: The story behind Warren Buffett's million dollar charity lunches at Smith & Wollensky