Analysts expect Amazon to raise the price of its Prime subscription

Wall Street analysts expect Amazon to raise the price of its widely successful Prime subscription offering.

“It’s about time,” Wedbush Securities’ Michael Pachter told Reuters.

With the higher wages and signing bonuses that the company had to shell out to attract new workers in a labour shortage, analysts believe that Amazon has every reason to up the price of Prime.

The ecommerce giant also had to spend more on shipping because it could not get products into the necessary warehouses.

It has forecasted an operating profit of anywhere between $0 and $3 billion, but analysts expect it to hit around the $2.5 billion mark, according to FactSet.

READ MORE: Former Amazon employee is facing 20 years in prison for stealing $270k of computer parts

US Prime subscribers last saw a price hike in 2018, where they saw their fee rise from $99 to $199.

Evercore ISI analyst Mark Mahaney said that a hike would be straightforward reasoning for the company, with more expensive fuel, trucking and goods themselves.

He believes that consumers will continue to pay more for Prime because they want the ultra-fast delivery option.

“They have pricing power because the value proposition is so strong,” he told Reuters.

So far Amazon has declined to comment on Prime’s pricing and the company’s chief financial officer
Brian Olsavsky has said there is currently no hike to announce but that the company “always looks at that.”
Former Amazon manager Scott Jacobson added: “Given all of the Q4 delivery challenges, raising the price of Prime doesn’t seem appropriate.
DeliveryEcommerceNews

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