On the day it announced that quarterly profit almost doubled, Amazon said the price of a Prime membership is going up. The annual charge in the US will be $139, up from $119, while the monthly fee will rise from $12.99 to $14.99, USA Today reports. It's the first Prime rate increase since 2018. In a statement, an executive attributed the decision to "the continued expansion of Prime member benefits as well as the rise in wages and transportation costs." The increase for new members will take effect Feb. 18; current members renewing after March 25 will pay the new rate.
The increase is "long overdue," one analyst said. "Amazon is facing much higher costs and is still investing heavily in Prime, so there is a real justification for hiking fees," said Neil Saunders of research firm GlobalData. Rival services also have raised fees recently, including Netflix. Prime includes access to faster delivery as well as Amazon's streaming services. The company said Prime has more than 200 million members worldwide.
Amazon's profit in the last quarter of 2021 jumped to $14.3 billion from $7.2 billion in the same period the year before. In addition to improvements in its cloud-computing and advertising businesses, Amazon benefited from lower-than-expected labor and supply costs, per the Wall Street Journal. The chief financial officer put the costs related to supply chain and labor issues at $4 billion. Most of the profit came from Amazon's investment in Rivian Automotive, a maker of electric vehicles. In after-hours trading Thursday, Amazon shares climbed more than 14%. (Read more Amazon stories.)