Amazon announced the following in its most recent earnings report: “Amazon is raising the price of its annual Prime subscriptions from $119 to $139 per year in the United States, the company announced along with its earnings report Thursday. The price of a monthly subscription will also increase from $12.99 to $14.99.” And… “The company's profits also doubled during the December-end quarter, to $14.3 billion, blowing past Wall Street analyst expectations.”
CNN Business
Note to readers: “I’ve interrupted my regular writing schedule this week to tend to other writing matters. This post will serve as a combo between my regular weekly post, which usually appears each Thursday, and Sunday Evening Reads, which inexplicably appears just after midnight each Monday morning. I’ll return to my regularly scheduled posting next week. Thanks for your indulgence!
We’re all getting hit lately with the rising costs of goods and services. Economists call it inflation, progressives call it corporate greed. I call it frustrating because my paltry income doesn’t keep pace with rising costs. Whatever your income, though, the continuous and steep rise in prices has been a shock.
When I heard the news a few weeks ago that Amazon was raising the price of its Prime Membership, I was angry. I had decided to finally pay for Prime in late 2020 (instead of taking advantage of an occasional free membership trial) because I was having my hip replaced in a few months and knew I wouldn’t be shlepping groceries to and from my apartment’s parking lot. And I wanted groceries delivered from Whole Foods, where I usually shop, without a delivery charge. Less than a year later, Amazon decided that Whole Foods was done with free delivery and would now charge $9.95 per order. It also raised its already high prices even higher and has major supply chain issues, so it’s rare to find fully stocked shelves.
I won’t evaluate the pros and cons of a Prime Membership, but you might be interested in this recent opinion piece in the Times, where a recovering Prime Member describes her life sans Prime.
What I would like to explore are the opposing views on price hikes, particularly during an ongoing, once-in-a-hundred-year pandemic.
— First there are the traditionalists who don’t bat an eye at product price increases, because of course, a company has to make up for even the slightest rise in its supply chain costs by passing that cost onto the consumer. They have to consider their shareholders, who would rise up like an angry mob (that means everyone these days) to protest their declining share wealth.
Take this example from The Motley Fool that sounds like an Amazon press release.
“Note that Amazon has increased the customer value a Prime membership provides over those years, so there is more bang for the buck.”
The Motley Fool fails to mention exactly what that extra “bang” is…
https://www.fool.com/investing/2022/02/08/amazon-costco-raising-membership-fee/
— Even NPR puts a positive spin on the Prime price hike, emphasizing that the company hasn’t raised its prices since 2018.
“The subscription service remains the singular most influential program for Amazon. Prime members are historically very loyal, beginning most of their online shopping searches on Amazon.”
https://www.npr.org/2022/02/03/1077088524/amazon-raises-price-of-annual-prime-membership-to-139
— This excellent article from Business Insider published just yesterday, is not as easy on corporations, price hikes and greed. It uses Starbucks as an example, but Amazon is doing the same: recording record profits and raising their prices.
“During the last quarter of 2021, for example, Starbucks reported an eye-popping 31% increase in profits, and revenue increased for the quarter by almost 20% to just over $8 billion. On the same call that Starbucks announced those terrific numbers, the corporation also announced that it would raise its prices over the next year — probably more than once.”
Finally for this evening, I recommend that you spend five minutes watching this video put together by Senator Bernie Sanders’ team that lays out exactly why Amazon and its former CEO, Jeff Bezos are the poster boys for corporate greed.
https://www.facebook.com/watch/?v=10157019494367908
Let me know what you think about the Amazon Prime price increase. Will you pay it?Do you think greedy corporations are at the heart of our across-the-board inflation?
I’d love to hear your thoughts in the comment section below!
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Do Companies Have To Raise Their Prices?