Is Amazon Prime worth it?
A look at how seven of the best Prime benefits add up
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Heading into the holidays, you may be rounding up the fixings for a family Thanksgiving dinner and filling a sack (or shopping cart – in store or online) with a heap of holiday gifts for friends and loved ones.
Is Amazon Prime, with Cyber Monday deals, free shipping and much more, worth $99 to help you save on all of that spending?
We crunched the numbers for seven Amazon Prime perks to help you figure out if the benefits outweigh the $99 fee.
1. Free shipping benefits (Estimated value = $300/year)
One of the primary appeals of Amazon Prime is its free shipping guarantee. Prime members get free two-day shipping, as well as free same-day delivery in certain cities and even same-hour delivery in certain ZIP codes.
|AMAZON PRIME FREE SHIPPING (Qualified items only)|
|Same-day delivery||Free in certain cities|
|Two-hour delivery||Free in eligible ZIP codes|
|One-day shipping||Free in certain cities|
|Saturday shipping||Price varies by item size and weight – as low as $7.99 per item|
|Standard shipping (4-5 business days)||Free|
If your dream is to have endless orders from Amazon delivered posthaste to your doorstep without racking up shipping fees, this is an excellent deal. Your savings on two-day deliveries should easily surpass a $99 membership fee.
This is a difficult benefit to value, since shipping fees can vary drastically, depending on the price and type of item. We’ve estimated an average of $15 per $50 item for two-day shipping fees. At a rate of two deliveries per month, that comes to $300 per year.
Drawbacks: Amazon already offers free standard shipping on orders over $25 to every Amazon member. If you typically order more than $25 worth of merchandise and aren’t in the habit of using expedited shipping, Prime shipping benefits may be more of a convenience than a cost saver for you.
We’d also note that, to compete with Amazon, Walmart recently introduced free two-day shipping on orders greater than $25. If you’re purely interested in the bottom line, Walmart may be the better place to shop – you can get expedited shipping on low-priced merchandise without having to pay a $99 membership fee.
2. Get a 5 percent discount on every Amazon purchase (Estimated value = $65/year)
With the Amazon Prime Rewards Visa Signature card, you get a 5 percent discount on every purchase that you make on Amazon. As more Whole Foods Market items are added on Amazon, you may score a deal on your Thanksgiving turkey, dressing and cranberries delivered to your door just in time for the big dinner.
Because this 5 percent discount is available year-round, it beats the rewards rate for Amazon purchases on any other rewards card. (Discover’s 5 percent cash back on Amazon purchases is only available during the fourth quarter, and though Discover matches first-year cash back, that likely wouldn’t trump 5 percent on Amazon purchases all year long.)
Also, note that when Amazon announced its purchase of Whole Foods, it said that Amazon Prime will be the Whole Foods customer rewards program. Chase’s spokeswoman for the Amazon Visa cards, the issuer for the Amazon Visa cards, has said that more Whole Foods Market items will be available on Amazon in coming months and they will qualify for the 5 percent discount that Amazon Prime cardholders earn.
For an Amazon Prime member who spends around $1,300 a year, 5 percent cash back adds up to $65 per year.
|AMAZON PRIME VISA SIGNATURE|
Why get it?
You are already a Prime member, you are thinking of joining Prime, or you spend $5,000+ on Amazon purchases or $99+ on Amazon shipping per year (in which case, Prime membership is definitely worth it).Read review
|Estimated Yearly Rewards Value ($15,900 spend)
$0 (requires $99 Prime membership)
Drawbacks: While you can rack up a significant discount on your purchases just by using the card – enough to offset your annual membership fee – you should keep in mind that Amazon also offers the Amazon Rewards Visa to regular Amazon members. With the regular Rewards Visa, you can earn 3 percent cash back without having to pay a membership fee.
3. 20 percent discount on diaper subscriptions (Estimated value = $28/year)
Amazon Prime offers some great benefits for Amazon Family members, and one of the more popular ones is its 20 percent discount on diapers. To get the discount, you must start a diaper subscription through Amazon’s Subscribe and Save service – Amazon will then deliver the diapers to you on a regular basis (on intervals between one and six months), and you can cancel at any time.
Drawbacks: A quick comparison of Amazon’s diaper prices verifies that the 20 percent discount can get you some of the lowest prices on diapers, without requiring a lot of footwork. However, the discount isn’t as great as it seems. Amazon Subscribe and Save is open to any Amazon member, and regular Amazon members are already entitled to a 15 percent discount as long as they subscribe to at least five items. So, the Prime discount is really more like a 5 percent discount. Also, you should be aware that Amazon prices fluctuate wildly, so you’ll need to keep a close eye on your subscription.
4. Free movie and TV show streaming (Estimated value = $96/year)
Amazon Prime membership entitles you to unlimited access to thousands of TV and movie titles at no additional cost. Since Hulu and Netflix charge around $7.99 per month for similar services, we figure that Prime’s free streaming service is worth around $95.88 year, nearly equal to your Prime subscription.
Drawbacks: While Amazon has been working to beef up its content, it doesn’t offer the same quality or breadth of content as say Netflix. However, it does have some good titles in its lineup, including original series “Transparent” and “Catastrophe.” As a free add-on service, it’s a great deal.
5. Free music streaming (Estimated value = $120/year)
You also get a free membership to Prime music, which grants you unlimited, ad-free access to hundreds of playlists and more than a million songs. Since Spotify charges a $9.99 fee per month for its subscription service, we figure that Prime music membership nets you $120 in value.
Drawbacks: Like its video content, Amazon’s music content is limited and not up to par with competitors such as Spotify, so maybe it’s not quite worth $120 per year. Still, as an add-on service, it’s icing on the cake.
6. Free unlimited photo storage (Estimated value = $60/year)
One nifty benefit of Prime membership is unlimited storage for your photos. While most storage services put a tight limit on the number of files you can store for free and can charge up to $99 per month for a terabyte of storage, Amazon lets you endlessly add photos to your account for free. Since Amazon itself charges $59.99 per year for a terabyte of storage, we figure this benefit is worth around $60 per year.
7. Free delivery through Prime Pantry and Prime Now (Estimated value = $150)
Along with its two-day shipping benefits, Amazon is currently rolling out several delivery services that – in conjunction with its recent acquisition of Whole Foods – could be the next big selling proposition for Prime membership.
Its Prime Pantry service is already available for most ZIP codes. Prime Pantry allows you to fill a “pantry box” with household items in smaller, “everyday” sizes and ship them on demand for a flat fee of $5.99. Most orders arrive within four business days. You can get the delivery fee waived if you add five “qualifying” items to the box.
Also, Amazon recently launched Prime Now in several major cities (and will be expanding to other cities soon). Prime Now is a one- to two-hour delivery service that brings you groceries, as well as restaurant orders and merchandise, from local shops. Two-hour deliveries are free, while there is a $7.99 fee for one-hour deliveries.
Essentially – if you live in a qualifying location – you can get groceries delivered within two hours for free. Considering what other delivery services – including Instacart – charge for this service, we value it at $150 per year.
Drawbacks: Amazon has a ways to go to compete with the likes of Instacart. While Prime Pantry does have a pretty good selection of household supplies and processed food items such as potato chips and coffee, the selection of perishable items – e.g., produce, meat, milk – that you can get through Prime Now is still very limited.
For instance, we couldn’t find lettuce or onions in the selection. (Note, Amazon does have an additional service – Amazon Fresh – that it is currently testing in certain cities that does deliver a full of array of grocery items, but this service comes with a subscription fee of $14.99 per month.)
Other noteworthy Prime benefits
As mentioned, there’s more to Amazon Prime than can fit in one article, but here are a few other benefits worth noting:
- 20 percent discount on prerelease video games. Savings on 12 $60 video games = $144/year
- Unlimited access to a selection of books, magazines and audio books on any mobile device. Savings on 12 books/year = $92/year
- One free eBook from the Kindle library each month. Savings on 12 eBooks = $42/year
- Prime Early Access deals. Savings = 20 percent or more on a variety of merchandise
- Amazon Prime Day. Savings = 20 percent or more on a variety of items
Bonus tip: Save with a half-price Amazon Prime Student membership
The Amazon Prime for Students program is a really get deal for students currently in college. You’re entitled to most of the same benefits as regular Prime members – including free two-day shipping – at a 50 percent discount. And, you get a 6-month free trial period. All you need is a valid .edu address to qualify. Benefits include:
- Prime video
- Prime music (once your six-month trial period expires)
- Free shipping benefits
- Free photo storage
- Twitch Prime
- Exclusive deals for Prime members
Adding it all up: Is Prime really worth it?
When we add up all the free services that come with Prime membership, the answer, by an overwhelming number is: Yes … maybe. Actually – it depends on which of the free services you value and make use of.
In the table below, you can see all our estimated values added together – the total is more than 10 times the cost of a $99 Prime membership:
|ANNUAL PRIME MEMBERSHIP ESTIMATED YEARLY VALUE (Average Prime customer who spends $1,300 per year)|
|Free two-day shipping||$300|
|5% discount with Amazon Prime card||$65|
|20% discount on diaper subscriptions||$28|
|Free movie and TV show streaming||$96|
|Free music streaming||$120|
|Free unlimited photo storage||$60|
|Free grocery delivery||$150|
|20% discount on 12 prerelease video games||$144|
|Unlimited access to books, magazines and audio books (12 books per year)||$92|
|Free monthly eBook from Kindle library||$42|
This is a huge value for a $99 fee, and you can see why Amazon Prime membership is well worth it to many of its members. But, it’s not worth it for everyone. If you don’t often have a need for two-day shipping and you prefer Spotify and Netflix over Amazon streaming services, you may have a harder time seeing the value in Amazon Prime membership.
Also, you should probably factor other costs into the equation. This recent statistic from Statista shows that the average Prime member spends $600 more per year on average ($1,300 total spend per year) than a non-Prime member on Amazon purchases. There’s a chance that all the conveniences of Amazon Prime may lure you into spending more on Amazon that you had intended.
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