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More on Amazon: 1) Morningstar and CIRP estimate Amazon's Prime subs have surpassed 10M. They...

More on Amazon: 1) Morningstar and CIRP estimate Amazon's Prime subs have surpassed 10M. They also estimate Prime members spend an average of $1,200/year on Amazon (twice as much as others), and that Amazon made $78 per Prime sub last year after various expenses. Bloomberg previously reported Amazon had only 3M-5M Prime subs as of Oct. '11. 2) Amazon Web Services is making a stronger push for enterprise accounts by adding virtual private clouds as a default option. Microsoft, VMware, and OpenStack supporters are pitching private and/or hybrid clouds as an alternative to AWS.
Comments (13)
  • I wonder if they are counting the free trial periods(one month) for prime? Do they incude the cost of suppling the instant videos for free and other perks to prime members?
    I like the service and have taken it for a second year but find I am using it less the second time around.
    12 Mar 2013, 11:19 AM Reply Like
  • I got a trial, free shipping on a HEAVY bench grinder on sale, I had it shipped overnight for 3.00 more. lol
    13 Mar 2013, 11:10 PM Reply Like
  • Love my Amazon Prime.
    12 Mar 2013, 04:55 PM Reply Like
  • Do you buy twice as much from Amazon because you have prime membership?
    22 Mar 2013, 05:21 PM Reply Like
  • The attraction of Prime is that you can quickly go order something you need, get it within two days, and not pay any shipping. So you don't deal with waiting until there are several items to order so as to save on shipping. Sometimes I place 2-3 orders in a day for various supplies (shoes, batteries, books, etc. etc.). The convenience is unparalleled. I beat myself up for waiting 2+ years before signing up; I blew a lot of money on shipping those years!
    22 Mar 2013, 05:38 PM Reply Like
  • Prime has made it so that I buy nearly everything from Amazon.
    22 Mar 2013, 08:00 PM Reply Like
  • Let me rephrase the question. If AMZN stopped prime, would you buy less from AMZN?
    23 Mar 2013, 08:46 AM Reply Like
  • I understand the consumer attraction of prime, but the question is directed at what benefit AMZN gets from offering prime. They get a annual fee and they get to spend a lot more money to get that annual fee.

     

    Analysts and AMZN suggest that "people who have prime spend twice as much as people who don't have prime". But that doesn't have the same implication as a claim, "people who spend more at Amazon get prime"

     

    If AMZN stopped prime would it impact revenue in a negative way or would they just lower their expenses and have the same revenue?
    23 Mar 2013, 08:53 AM Reply Like
  • I will be a 1 time Prime member, but the point is they are losing money on my subscription. I will not spend $1200 there this year, and I will make my $40 back in free 2 day shipping on a couple purchases and the boatloads of free content I get (lol). If I do spend $1200 there this year it will be on a heavily discounted piece of electronics equipment that they are selling for no margin.

     

    I love Amazon. Paying people to take things is a fantastic business model LOL.

     

    Good luck!
    12 Mar 2013, 07:56 PM Reply Like
  • Be careful I too thought that way.

     

    I have noticed that Amazon is getting better at combining orders. Awhile back I was shaking my head trying to figure out how they made money shipping small multiple orders. I see now they have something called add ons that will ship when you have ordered enough to make shipping them profitable.

     

    Amazon is a great company and great service if they were more profitable it might make a good investment but they seem more a nonprofit then business.
    12 Mar 2013, 08:17 PM Reply Like
  • I'm a little confused here. A little over a year ago most analysts estimated that Amazon had already surpassed 10M prime subscribers. In fact JP Morgan had estimated 13M as of Sep 30, 2012 according to the Bloomberg article referenced above. Now along comes Morningstar and CIRP saying that subs have now surpassed 10M. Unless my math is rusty, that's not much growth.

     

    The AllThings D article suggests that 10M figure represents a double from a year ago but they must be comparing to the much lower number offered by nameless insiders as sources in the Bloomberg report. Now if those sources were unreliable or just plain lying, then all we have is an analyst's estimate that is no better than the average estimate over a year ago. If on the other hand those sources were good, then I think we have a pretty good idea how accurate the analysts' guesstimates are.
    12 Mar 2013, 10:43 PM Reply Like
  • AMZN doesn't report how many Prime members they have, let alone how many drop it after the one month trial. Consequently, every analyst makes up their own number to suit whatever they're pushing.
    22 Mar 2013, 05:24 PM Reply Like
  • Prime is awesome. Most people I know have it. If the subs are actually that low (I doubt it), it's because you can add family members accounts to your prime sub so they get 2 day shipping as well.
    13 Mar 2013, 04:20 AM Reply Like
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