Amazon considers raising Prime subscription fee by up to $40

The online retail giant may increase the Prime membership fee for its US customers by as much as $40 due to increasing shipping costs.

Amazon may increase its US Amazon Prime membership fee by up to $40, the company's chief financial officer announced Thursday during an earnings call.

CFO Tom Szkutak said growing transportation costs may cause the online retail giant to add between $20 to $40 to the subscription fee. Prime -- which offers free, two-day shipping on certain items and access to Amazon's Prime Instant Video library and Kindle lending library -- currently costs $79 a year. He said the subscription service, has become very popular in the last nine years. Prime eligible items have grown from 1 million to 19 million units, according to Szkutak.

"Shipping costs have gone up a lot, fuel costs have gone up a lot," he said.

Szkutak said the Prime program has "tens of millions" of members worldwide, but he wouldn't say what the figure is for US customers. Amazon has not decided on a rollout plan for the possible increase.

Amazon just celebrated a record holiday season for Prime, boasting that it signed up more than a million new customers in the third week in December. The signups were coupled with Amazon launching the ability for customers to gift a Prime membership. In October, Amazon raised the threshold for free shipping for non-Prime customers from $25 to $35 while also plugging its Prime program.

Updated, 2:43 p.m. PT: Added more information from the call and more background information.

 

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