Amazon has 143 billion reasons to keep adding more perks to Prime

Forget AWS. Without Prime, Amazon is nothing.

On Wednesday, Amazon unveiled a new perk to its Prime membership program: A rotating collection of books, magazines and short stories that Prime members can read for free.

The new freebie isn’t earth-shattering on its own, but it’s just the latest in a series of additions Amazon has made to turn Prime from a $99-a-year delivery subscription into an entertainment-and-shopping must-have.

The program, which has long been known for two-day shipping, now gives members bonuses like same-day delivery in many cities; video and music streaming; and unlimited digital photo storage.

Code Commerce Series Returns to Las Vegas at Money20/20

Find out where retail and e-commerce are headed.

It’s clear that Prime’s success is perhaps the biggest contributor to Amazon’s success to date. Prime members shop more frequently and spend more money on Amazon than non-Prime members do. They also price-compare less.

There’s also a lot we don’t know about Prime and its impact on Amazon. Like how many Prime members there are, other than at least 46 million. And how much they are worth to Amazon.

But a recent research report titled “Amazon dominates ‘Prime’ Time,” from Cowen and Company’s John Blacklege, took a shot. Based on a monthly survey it conducts, Cowen believes Amazon has 49 million Prime members in the U.S. alone. That’s a tad higher than my educated guess, but certainly in the ballpark.

And based on that number plus other findings and estimates from its surveys, financial models and third-party data, Cowen believes the Prime customer base in the U.S. is worth $143 billion. Here’s the math that got them there:

What does it all mean? Expect Amazon to continue to load up Prime with more perks to convert the unconverted. And don’t be surprised if it continues to experiment with different membership payment models, too.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s