Markets

Amazon Prime is getting more expensive

Amazon Prime is getting more expensive

Amazon is raising the price of its annual Prime membership fee by 20 percent starting next month.

Amazon's Prime members get free two-day shipping, as well as free same-day and one-day shipping in many areas.

As Amazon CFO Brian Olsavsky pointed out on the company's earnings call on Thursday afternoon, this is the second time Amazon has raised prices on Prime, with the first price hike occurring in March 2014.

Amazon said it earned $1.6 billion in the first three months of this year on revenue that soared to $51 billion from $36 billion in the same period last year. It's not known how many subscribers Prime has in Australia.

"Amazon continues the trend of investment-fueled revenue expansion", Charlie O'Shea, lead retail analyst for Moody's, wrote in a note to clients. Its core e-commerce business has posted such low margins - in many cases by Amazon's design, it should be said - that nearly anything new that Amazon does will have higher margins.

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AWS accounted for 73 per cent of Amazon's operating income during the quarter - $1.4bn out of $1.9bn, which is up from $1bn in Q1 2017. Analysts were expecting $1.01 billion, according to analytics firm FactSet.

The Redmond, Wash., company said revenue from its Azure cloud computing service grew 93 percent during the quarter, keeping up the momentum in that space for several quarters.

"The value of Prime to customers has never been greater". Though Microsoft did not break out revenues for its various cloud properties, it did claim a 93% year-over-year jump in Azure earnings. And while Amazon banned paid reviews a year and a half ago, the Washington Post says that hasn't stopped some sellers from recruiting reviewers on social media sites, reporting that in February there were almost 100 Facebook groups, one with 50,000 members, for the objective of sourcing positive reviews.

Amazon's global headcount is up 60 percent from a year ago at 563,100 full-time and part-time employees, thanks to a hiring spree and an influx of workers from Whole Foods Market.


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