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The History of Amazon Prime

Any company that has been around for more than ten years and has seen a significant increase in revenue from introducing its loyalty program is likely running an online shopping website. Do you want to know the history of Amazon Prime?

Jeff Bezos created Amazon Prime to motivate customers. It helps drive consumption by providing faster shipping than the US average shipping time of 4 to 5 business days.

Amazon Prime was initially priced at $79 per year to cover free two-day shipping. In 2013, Amazon raised the price to $99. This is an example of how companies can change prices over time.

Looking at Amazon Prime, $99 for 12 months is cheap. Customers who use this service ship more products, and it’s worth paying that fee.


What is Amazon Prime?

Amazon Prime is a paid subscription from Amazon. It gives users access to services such as one or 2-day delivery of goods, video, streaming music, gaming, e-books, and grocery shopping.

In April 2021, Amazon disclosed that Prime has more than 200 million subscribers worldwide. Click To Tweet

When was Amazon Prime founded? It was based on February 2, 2005. 


How Much of a Game Changer is Amazon Prime?

Research has shown that these valuable members spend $1,500 a year on average, while non-members only spend about $625.

Amazon has created a network effect with customers who shop at Amazon often. 

Amazon’s Prime membership program is responsible for much of the company’s success. 

history of amazon prime

Prime adoption is growing: Amazon Prime is on the rise. As of September 2021, approximately 65% of Amazon customers are subscribed to Amazon Prime. This number has risen from 25% in 2013.

Prime members shop more frequently: Amazon Prime members are coming back more often: 73% of Amazon Prime customers said they bought products on Amazon 2 to 3 times a month, while only 22% of non-prime shoppers did.

Prime members spend more: 49% of Prime members spend over $800 annually, while only 16% of non-Prime users do so.

The longer they’ve been a member, the more they spend: 41% of those in the first year of a Prime membership spend over $800 a year, versus 68% of members of more than four years.


How Does Amazon Prime Look Internationally?

In some countries, Amazon Prime is called Amazon Premium. It’s available in the US, UK, Canada, Japan, Spain, Italy, Germany, France, Austria, and Belgium.

A simple sign of the power of Amazon Prime is how Belgian customers in Belgium signed up for a Premium account in France and then used it to purchase goods. This demonstrates that when someone wants something, they will go through many steps to get what they want.

Amazon Prime is a contributor to Amazon’s most significant expenditure – logistics. In 2015, it was revealed that shipping costs exceeded $5 billion for the first time.

That is one of the reasons why Amazon is exploring Flex, Prime Now, and airplanes. They cannot afford to take Prime away because Prime customers might go to other online retailers or marketplaces.

According to research by NPD, more than 24% of households in the US have at least one Amazon Prime account. 

Amazon Prime has had a significant impact on the retail industry.


Prime Has a New Extension: Prime Now

Amazon introduced Prime Now. It’s a service that offers a catalog of goods available for one or 2-hour delivery. It was launched first in Manhattan in December 2015. 

Prime Now is being used by customers who want ultimate convenience at a cost. Cowen & Co. surveyed 1,250 adults in the US over the age of 18 and found out that 25% of subscribers to Amazon’s Prime used the Prime Now service in January 2016, which analysts consider as impressive early penetration.

history of amazon prime

Amazon Prime Now is a service that offers delivery within 2 hours, but only if you are an Amazon Prime member. 

Amazon has been expanding its Prime Now service to more cities. The goal is for the program to be available in as many major markets as possible.

The majority of Prime Now customers are between 25 and 44. Click To Tweet

Seventy percent order items several times a month, while 24% buy goods at least once a week.

The top category was media, with 60% of respondents purchasing items from that group, 47% bought electronics with a $50 or lower price, 44% purchased personal care items, and 41% bought apparel, shoes, and accessories. On average, Prime Now customers purchased items from four categories.

Prime Now is a way for Amazon to stay relevant and competitive with other delivery services. This service offers local merchants the opportunity to provide exclusive deals via the Prime Now app.


Final Thoughts on the History of Amazon Prime

The history of Amazon Prime is an interesting one. It has a great concept, one that customers quickly embraced. And why not? Amazon Prime and Prime Now provide a quick delivery option for customers with a wide variety of products to choose from.