Amazon has announced it is raising the price of its popular Prime subscription offering despite seeing profits surge to £10.62 billion ($14.32 billion).
Prime subscribers will need to pay a fee of £102 ($139) annually from this month, a rise from £87 ($119). The change will come into effect on 18 February, and after 25 March for existing members.
It defended the rising costs in its earnings call, pointing out its array of premium content including Amazon original programming and the upcoming release of The Lord of the Rings: The Rings of Power.
The ecommerce giant cited record holiday sales in its fourth quarter for the rise in profits however said a hike in the price of its Prime subscription was necessary to offset the rising operating costs.
In the three months ending in December 2021, Amazon’s sales were up 24% from a slow third quarter to £101.35 billion ($137.4 bn), sales are also up 9% year-on-year.
Amazon had its most lucrative Black Friday and Cyber Monday weekend last year, saying that “between Black Friday and Christmas, US-based third-party sellers sold an average of 11,500 products per minute.”
Despite the positive news on the sales front, the company, like many others around the world, is still reeling from the impacts of a damaged supply chain.
To combat the difficulties Amazon upped its starting wage in September to £13.32 ($18) an hour and began offering signing bonuses to entice part-time workers.
“Lost productivity and network disruptions were driven primarily by labor capacity constraints due to challenges in staffing up our facilities for peak,” Amazon’s chief financial officer Brian Olsavsky said in an earnings call.
“This was driven by the very tight labor market in the second half of 2021, and more recently by the emergence of the Omicron variant.
“We do expect these cost challenges to persist into Q1, albeit adjusted for lower seasonal volumes relative to the fourth quarter.”