The ROI of Amazon Prime: Is $99 worth it?

imageThe ROI breakeven point for Amazon Prime at the new $99 subscription rate is essentially “10-20 items purchased throughout the year”. (Breakeven is closer to 10 if you value 2-day shipping & closer to 20 if you value standard shipping) Alternatively, if you actually use Amazon Video for entertainment displacing Netflix & you order at least one item, you break even.

It may very well pay for itself fairly quickly depending on how much you order from them. Cost of shipping 2-day is $8-$15 depending on the size/weight of the item(s). Hence the “10 items at 2-day shipping” breakeven threshold. Standard shipping is $4-$8 for items under $35, hence the “20 items…” logic. (Caveat with this is that the items need to be cheap, otherwise shipping would be free & you have to be okay with 7-10 day shipping) Netflix for a year is $79, hence the Amazon Video breakeven logic. Technically, there’s alternative uses that could possibly help validate the $99 spend such as Amazon Kindle lending library or Amazon’s new storage service but I don’t know anyone that finds value in these compared to other services or purchases and it’s consequently hard to establish a concrete value of these benefits.

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