Amazon Prime may be wildly popular, but it's taking a toll on Amazon's (AMZN) profits, notes...

|By:, SA News Editor

Amazon Prime may be wildly popular, but it's taking a toll on Amazon's (AMZN) profits, notes Jeff Bailey. Thanks in no small part to Prime, Amazon's net shipping costs grew to account for 4.9% of its net sales in the first 9 months of 2011, up from just 2.9% in 2007. Soaring shipping costs and capex helped compress Amazon's Q3 margins, and thereby contributed to its earnings miss.