By David Dorf-Oracle on Feb 03, 2015
Has it been 10 years? During that time Amazon's revenue has increased from $6.9B to $89.0B, and I'm guessing the unique program was a big part of that growth. It's estimated there are $40M members, which would represent about 45% of Amazon's US customers. I'm a member (although I only receive the free 2-day shipping because I share my brother's membership). The student discount trains young shoppers to expect 2-day delivery, and I imagine the program is pretty sticky. Unfortunately, Amazon is pretty secretive about its successful program. Clearly they lose money on the actual shipping, but they seem to make it up on the increased number of purchases.
Now there's Prime Fresh for $299/year to deliver fresh groceries in limited cities. Back in 2005 I could never have imagined how successful this program appears to be, and what's more impressive is the breadth of its offerings. Now Amazon is starting to open stores on college campuses, considering the purchase of existing Radio Shack stores, and there's always PrimeAir hanging out there waiting for regulators to set it free. I wonder what's next?