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Is Amazon Prime worth the new $ 119 price tag?



Amazon

AMZN, + 4.32%

have raised the annual fee for their prime membership program for the first time since 2014 – but that does not necessarily mean that it is less favorable to most consumers.

Online retailer announced that it will raise the annual fee for Prime membership in the US by 20% to $ 119. The change comes when Amazon reveals that it now has more than 100 million people worldwide who are members of the program. In January, Amazon raised its monthly membership fee from $ 1

0.99 to $ 12.99 a month.

Amazon said it is raising the price of Prime membership to offset the cost of the program, thanks to free shipping and digital content streaming. But consumers who are considering Prime and those who are already members must carefully consider whether membership is still worth the price.

Ultimately, the decision will be how much value every single consumer draws from the program, with everything from free two-day shipping on Amazon purchases to free photo storage and Audible free audiobooks. (Amazon did not immediately return a request for comment.)

"It's easy to go on autopilot and extend your membership for these programs," said Robert Harrow, head of credit card research at the Personal Finance website ValuePenguin .com. "But if you're not the kind of consumer who uses all these services, maybe it's not worth it."

How the benefits of Amazon Prime membership are shattered at the new price point:

Free shipping is not what it once was

First and foremost, for those who make the majority of their purchases online, the theoretically pay for free shipping options for the cost of a Prime membership. For example, the cost of two-day shipping (which is free upon Prime membership) for an external hard drive is more than $ 11. After only 10 two-day deliveries, a Prime membership could pay off.

In many parts of the country, Prime members can also receive free delivery on the same day, two hours and on the release date if their order meets certain specifications. Recently Amazon Prime members received a new benefit: Free 2-hour food delivery from select Whole Foods locations.

See also: Your Amazon Echo Could Make You Spend More Money

While Prime's free shipping options once stood out, it stands out less today. Competitors have followed the example of Amazon. Walmart

WMT, -0.53%

has introduced free two-day shipping for millions of items online if the order is $ 35 or more.

And research has shown that Prime members are doubling their spending on Amazon over non-Prime members, perhaps to justify the cost of membership. Depending on whether this increases a person's total spending, a prime membership could easily become a budget buster.

In addition, many consumers would have a prime membership to use the free shipping for Christmas shopping, Harrow said. But these people may be better off without an annual membership. "They should consider canceling Prime for the year and registering only for the months they use it," he said.

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Access to online content alone could make a prime membership a bargain

The content alone could pay for Prime membership. For starters, members have free or low-cost access to thousands of TV shows and films through Prime Video – including critically acclaimed shows such as the Amazon-produced "Transparent" and "The Marvelous Mrs. Maisel." And music lovers have free access to more than a million songs through Prime Music.

Meanwhile Netflix

NFLX, -0.36%

costs $ 11 a month for its standard plan, which includes HD streaming and the ability to watch content on two screens simultaneously, and Hulu will be charged the same price for its commercial free service. On the music side, Spotify

SPOT, + 1.70%

costs $ 10 a month and Pandora

P, -1.01%

offers ad-free music streaming for $ 3.99 a month.

Granted, competitors like Netflix or Spotify might have more popular or more extensive catalogs. Therefore, consumers should not only value the value of Prime Video or Prime Music by price. "It depends largely on personal taste and what people prefer," Harrow said. In other words, if someone does not like the content available on Amazon, it's not worth it.

And then there are all the unused freebies

In a thread on Reddit, who discussed the price of Amazon Prime given the price Many users were surprised to learn that they have access to free video game streams and discounts for games via Twitch Prime could get. Prime members without a Kindle or Fire tablet or the Kindle app on other mobile devices may not use the books and magazines they have access to.

Similarly, the discounts that members can receive at Whole Foods are virtually worthless if someone does not live near one.

These benefits have value when they are actually used. For example, if you get one free e-book per month through the Kindle Library, that's a savings of $ 42, according to CreditCards.com.

"When it comes to all those free things, people need to be realistic, actually use them," Harrow said. "If you do not use those things, that's not good value."


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