Amazon Prime is one of the most popular retail loyalty programs in U.S. history. According to Business Insider, Amazon claimed in a May 2018 shareholder letter that it had over 100 million Prime members worldwide as of 2017. As of December 2018, it had more than 100 million U.S. members alone.
What’s all the more remarkable about Prime’s subscriber count is the fact that you must pay to join. Regular Prime members pay $119 per year when billed annually or $12.99 per month (about $156 per year) for the more flexible monthly plan. Prime Student members, who must have valid .edu email addresses and be able to prove that they’re actively enrolled in at least one U.S. college course, pay $59.99 per year when billed annually and $6.49 per month (about $78 per year) when billed monthly. While tens of millions of consumers happily pay comparable annual fees for warehouse store memberships, most other common retail loyalty programs – such as those run by supermarket and department store chains – cost nothing to join.
Why is Amazon Prime so popular? And is it really a good value for the cost?
My wife and I have been Prime members for several years, and we regularly crunch the numbers to ensure that it remains a good value for our needs. We always determine that it is, but it may not be worth the cost for you or your family. So let’s take a closer look at Amazon Prime’s core features and member perks, then weigh its relative merits and demerits to determine when it’s worth the annual expense.
These are Amazon Prime’s core features:
30-Day Free Trial
All new Prime members are eligible for a 30-day free trial to test-drive the service. During the free trial, you have access to all Prime-exclusive perks and benefits.
You’ll need to enter a valid credit card to secure your free trial, and your membership will automatically roll over to paid status at the end of the trial period unless you cancel.
Household Prime Membership
Amazon allows multi-person Prime memberships covering the same household. My wife and I pay a single annual fee for our joint Prime membership. Like merging finances in joint accounts, joint Prime memberships are common practice for spouses and committed domestic partners. Household Prime memberships also make sense for long-term roommates.
Amazon Prime’s most valuable benefit is Prime Delivery, a collection of Prime-exclusive free and discounted delivery options including:
- Free Two-Day Delivery. This is Prime’s signature benefit. It’s available on more than 100 million Amazon items for customers in the continental United States. There’s no minimum order size and no limits on delivery frequency. By comparison, free shipping takes anywhere from five to eight business days for non-Prime members, depending on their location and the order’s components.
- Free One-Day Delivery. Free one-day delivery is available across the continental U.S. on more than 10 million Amazon items. Look for the “Prime FREE One-Day” logo on eligible items. One-day delivery items arrive by 9pm local time the day after they’re ordered. There’s no minimum order size and no delivery frequency limits.
- Free Same-Day Delivery. This is more like free 10-business-hour delivery. Eligible items – about 3 million in all – ordered before noon local time arrive by 9pm local time on the same day. Items ordered in the afternoon or evening arrive the following day. To qualify, orders must have at least $35 in items eligible for free shipping. Same-day delivery is only available in select cities – roughly speaking, the largest 50 to 100 U.S. metro markets, with new cities added regularly.
- Free Two-Hour Delivery. In select major U.S. cities, Amazon offers free two-hour shipping through its Prime Now service. The selection of eligible items is relatively small – in the tens of thousands – but includes Amazon devices such as Kindle, Fire, and Echo, plus household essentials. Delivery from local vendors not directly associated with Amazon – for instance, locally owned liquor stores for alcohol delivery – is available in some cities. The minimum order threshold varies by location.
- Secure In-Car Delivery. In select U.S. cities, Amazon offers secure in-car delivery through its Key by Amazon service. Key by Amazon couriers securely unlock your car, deposit your order inside, and lock it back up, all without you needing to do a thing. Vehicle eligibility is limited to newer models from specific manufacturers – mostly domestics such as Ford and GM – but is subject to change without warning. Check eligible vehicle models and locations at the Key by Amazon page.
- Secure In-Home Delivery. In select U.S. cities, Amazon offers secure in-home delivery through the Key by Amazon app. The process works much like in-car delivery. You can watch deliveries in real time – and make sure the delivery person minds their business inside your home – through the app. You’ll need to install a special lock and camera, and register any frequent guests to limit Amazon’s liability for damage or theft, before accepting your first in-home delivery.
- Amazon Day Delivery. If you typically make multiple orders per week and don’t mind waiting a few extra days for earlier orders, you can set a standing “Amazon Day” on which you’ll receive everything you ordered during the preceding week. It’s a nice perk for Prime members who frequently travel for business; setting your Amazon Day for Friday or Saturday reduces the risk of package theft when you’re out of the house earlier in the week, for instance.
- Release Date Delivery. Amazon Prime members are eligible to shop for pre-order items at least two days before their scheduled release dates, then receive free guaranteed delivery of those items on that date.
Additional delivery perks for Prime members include:
- Shopping rewards (either points to use as a credit toward future purchases or instant discounts) when you select the “no-rush” delivery option
- Free delivery on special items that don’t normally qualify for free delivery, such as bulky, heavy, or fragile items
- Discounted expedited delivery on items that don’t qualify for free one- or same-day shipping
Prime Video is Amazon’s Prime-exclusive library of free TV and movie content. Amazon Studios’ top original shows are available through Prime Video at no additional charge, along with hundreds of popular non-Amazon shows, movies, and live out-of-market sporting events. Amazon’s entire universe of video content is not available for free to Prime members, however; premium shows and films may carry one-time rental fees.
Prime Reading is Amazon’s Prime-exclusive collection of fiction and nonfiction books, magazines, and audio recordings. Prime Reading works are available for download on any compatible device, Amazon-made or otherwise.
Prime subscribers can stream over 2 million songs for free, including new hits and old favorites, through Prime Music. It’s worth noting, however, that this is a fraction of what’s available from leading streaming services such as Spotify and Apple Music, which have more like 40 million songs in their respective libraries.
Prime Deals are Prime-exclusive shopping discounts and promotions. They’re subject to change, but here’s a representative sample:
- 40% off your first pet food order with Amazon’s Subscribe & Save recurring delivery service
- Exclusive weekly Whole Foods deals and 10% off hundreds of Whole Foods SKUs
- Two free audiobooks with a free trial of Audible
- 20% off Amazon’s premium music streaming service
- Up to 15% cash back on select purchases with your Amazon Prime Visa Signature Card
Prime Add-On Subscriptions
Prime members can take advantage of these add-on subscription services:
- AmazonFresh. AmazonFresh is Amazon’s perishable grocery delivery service. Its offerings expanded dramatically after the Amazon’s merger with Whole Foods Market; Whole Foods’ 365 store brand is a fixture in the Fresh marketplace now. AmazonFresh carries a significant additional fee on top of the monthly or annual cost of your Prime membership.
- Prime Pantry. Prime Pantry is Amazon’s non-perishable grocery delivery service. Prime Pantry’s inventory includes most of what you’d find in your grocery store’s interior aisles: household products such as toilet paper and paper towels, canned food and beverages, non-perishable snacks, baby food and care products, personal care and wellness products, and over-the-counter medications. There’s a small additional monthly fee to earn free shipping on all Prime Pantry orders; otherwise, shipping is free on orders over $35.
- Premium Prime Video Channels. For a significant additional monthly fee, Prime members can watch premium video content not included in the regular Prime Video. Premium Prime Video includes subscription movie and TV channels such as HBO and Starz, plus a decent lineup of live sports.
- Amazon FreeTime Unlimited. For a small additional monthly fee after a one-month free trial, Prime members can add unlimited kid-friendly content – books, TV shows, movies, and apps – through Amazon FreeTime Unlimited. FreeTime Unlimited includes built-in parental controls.
- Amazon Music Unlimited. Amazon Music Unlimited is an expanded song library with over 50 million songs – on par with top standalone subscription streaming services. There’s a decent additional monthly fee associated with this service.
Prime members are under no obligation to add anything to their Prime subscriptions. Before you subscribe to an add-on, check its availability; AmazonFresh, for instance, isn’t available in all locations.
Amazon Prime Rewards Visa Signature Card
The Amazon Prime Rewards Visa Signature Card is a premium cash back credit card that’s ideal for Prime members who spend heavily at Amazon and Whole Foods.
A more powerful version of the no-annual-fee Amazon Rewards Visa Signature Card, Amazon Prime Rewards Visa Signature earns 5% cash back on Amazon-universe purchases and an unlimited 2% cash back on purchases at eligible restaurants, gas stations, and drugstores. Credit qualification applies; this card is designed for Prime members with good to excellent credit. Before you apply, check your credit score.
Here’s why you might want to subscribe to Amazon Prime:
- Vast Array of Shipping Options. Amazon Prime’s most valuable benefit is a slew of free or discounted shipping options, from two-day free shipping on some 10 million items to ultra-fast two-hour shipping in select metro markets. If you can’t wait to receive your frequent Amazon orders on the company’s leisurely “no-rush” timetable, Prime’s subscription fee may seem like a bargain.
- Media Perks Have High Potential Value for Frequent Users. Prime Video, in particular, delivers tremendous value for frequent users. While it’s not a universal library – Netflix has a trove of original shows and movies, and the newest, choicest flicks carry per-rental fees – it’s more than enough to keep Prime members occupied on nights in.
- Higher Cash Back Earnings on the Amazon Prime Visa Signature Card. For frequent Amazon and Whole Foods shoppers with above-average credit, the Amazon Prime Visa Signature Card’s 2% cash back bonus – higher than the regular Amazon Rewards Visa Signature Card’s – subsidizes or entirely offsets Prime’s annual membership fee. Earning 2% back on gas and restaurant purchases is nice too, though you don’t need to be a Prime member for that.
- Special Discounts at Whole Foods. Prime members enjoy exclusive 10% off deals on hundreds of items at Whole Foods, subject to change and availability. Were it not for this perk, I personally wouldn’t bother shopping at my local Whole Foods at all, but this discount is deep enough to make Whole Foods’ prices competitive with nearby downscale supermarket chains.
- Free Trial Period. You can cancel your Prime subscription without penalty during the 30-day free trial period – a lifesaver for budget-conscious shoppers looking to dip in their toes without paying anything out of pocket.
- Household Membership. Joint household memberships are ideal for couples, families, and long-term roommates looking to pool their shopping and media consumption dollars.
- Membership Discounts for Students. Verified students enjoy 50% off the monthly or annual cost of a Prime membership. That’s great news for penny-pinching scholars expecting to rely on Amazon for timely deliveries of textbooks, electronics, school supplies, and basic dorm necessities.
Consider these downsides before pulling the trigger on Amazon Prime:
- Relatively High Annual Fee. Amazon Prime has a relatively high annual fee: $119 per year when billed annually and $12.99 per month (about $156 per year) when billed monthly. The annual fee is roughly double the cost of a basic Costco membership, for reference. If you’re not a frequent Amazon or Whole Foods shopper, don’t regularly take advantage of Prime’s non-shipping perks and features, and don’t mind waiting a few extra days for delivery, Prime probably isn’t for you.
- No Retroactive Refunds When You Use Prime Benefits. If you use your Prime benefits at any point during your subscription period, you’re automatically ineligible for a refund of Prime fees paid during that period. For instance, say you opt for the two-day free shipping benefit on one order in January, the first month of your Prime membership year. You then exercise no further Prime benefits until May, when you decide to cancel your paid-annually Prime subscription. You’ll pay the full cost for the entire year, despite canceling five months in. That’s an incentive to pay for Prime on a month-to-month basis, despite the higher annualized cost. And it’s a disadvantage over warehouse stores such as Costco, whose expansive satisfaction guarantees make it fairly easy to cancel for a retroactive refund.
- Expedited Food Delivery Costs More. Amazon Prime membership does not entitle you to expedited grocery deliveries. For most folks, the fastest, cheapest way to get edible essentials without leaving the Amazon ecosystem is to stop by the nearest Whole Foods Market, where Prime members enjoy 10% off select items. AmazonFresh is particularly expensive; mercifully, shipping is free on Prime Pantry orders over $35.
- Free Music Library Isn’t Particularly Impressive. While 2 million songs sounds like a lot, Prime’s free streaming music library isn’t very extensive compared with top-of-the-line streaming services such as Apple Music and Spotify. Those seeking deep cuts may want to look elsewhere or spring for a paid Amazon Music Unlimited subscription.
Amazon Prime has a lot to offer, but it isn’t for everyone. My wife and I get our money’s worth out of the service and feel it’s a fair value. But we know plenty of occasional Amazon shoppers who can’t justify spending more than $100 per year for free two-day shipping, complimentary access to original features and TV programming, exclusive discounts at Whole Foods, and assorted other Prime benefits. Other shoppers take issue with Amazon’s growing retail dominance and prefer to support independently owned retailers instead.
Whether Amazon Prime makes sense for you and your family depends on how much value you can extract from it. If you’re already selecting one- or two-day shipping on frequent Amazon purchases, shopping at Whole Foods, and regularly streaming Amazon content, it makes sense to join Prime. If you shop Amazon infrequently or not at all, don’t watch much TV, and don’t live near a Whole Foods, Prime likely isn’t worth it for you. If you’re living somewhere between those two poles, your choice might be tougher, but you now have what you need to make an informed decision.
Do you use Amazon Prime? Do you feel it’s worth the cost?