How, Inc. (NASDAQ:AMZN) Made Prime Into An Indispensable Product You’d Pay Anything For


A few weeks before announcing its earnings in February 2005,, Inc. (NASDAQ:AMZN) Founder and CEO Jeff Bezos, on one Saturday, called a group of employees for a meeting at the boathouse behind his home.

The company’s employees had been exploring the possibilities of having a membership program whose main focus would be offering quick shipping to customers. The idea eventually got the attention of the CEO. At the boathouse meeting, Bezos gave a clean bill to the idea and told the employees that it was it was a good idea and urged them to move quickly and start implementing it.

The company later unveiled Amazon Prime when announcing its earnings report that February. The announcement was initially met with media silence and minimal coverage. Many concentrated on how much it would cost the company to offer two-day shipping service to customers for just $79 a year. Many did not think of how much the new initiative would help in changing customer online shopping behavior. At the time, the CEO said that although the initiative is expensive in the short-term, it brings a lot of benefit and is very convenient for customers. As often the case, Bezos was proven right.

Las week, the company announced that Amazon Prime as over 100 million subscribers spread out globally. Many of the customers were attracted by the company’s promise of a seamless shipping experience for their online and offline shopping needs.

The company now wants customers to pay for the service. On Thursday, Amazon announced that it will be increasing the annual charges for Prime from the current $99 to $119 in a move the company says will help in offsetting the increasing cost of offering the service. Although the move is likely to spark off an outcry among customers over the rise of prices, analysts have predicted that customers will finally embrace the change because Prime has increasingly become indispensible for many online shoppers.

During its launch in 2005, the main selling point of the service was the two-day shipping on purchases. Currently Prime offers same-day and even two-hour delivery on several products including groceries from Whole Foods, which Amazon purchased in 2017.

This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.