Market Overview

Amazon Considering Raising the Price of Prime Memberships by 20%; Fourth Quarter Conference Call Highlights


Below are some highlights from the Amazon (NASDAQ: AMZN) conference call:

Worldwide active user accounts exceeded 237 million.

Worldwide active seller accounts were over 2 million.

Even as fuel and transportation costs have increased the cost of shipping, the price of Amazon Prime has not increased, yet its use has gone up.

We are looking at raising the price of Amazon Prime by 20%.


Globally, there are tens of millions of customers, it is hard to gauge the impact of raising the price on Amazon Prime.

Amazon Prime: Customer usage on a per-customer basis has gone up dramatically, the product line has increased from 1 million to 19 million, without any price increases.

Other than shipping benefits of Prime, there is the Kindle and Instant Video library segments but this did not have any affect on the expected price raise.

Amazon Fresh is very early, there’s been good adoption and conversion, we are pleased with what we are seeing, but it is still early.

International growth is stemming from our third-party business.

Very broad in terms of growth in the U.S.

Consumables were very strong.

ETM was strong.

Amazon Web Services is growing very fast, even with the decline in Capex.

Our investment decisions will be independent from the decision to have a price increase on Prime.

It is hard to tell if the shorter holiday shopping period had an impact on Amazon.

The decision to raise the free shipping threshold from $25 to $35 and the following events is independent from the decision to raise the price on Prime.

We are seeing great engagement from our customers on Prime.

We track conversions from the free Prime trial, which is growing nicely.

We are looking at users shopping patterns in terms of physical goods and digital content.

We are very pleased to have Kiva in the Amazon family.

Cannot comment on Google Product Listing Advertisements.

More connected devices are a tailwind for our business and has helped us grow.

We are looking to maximize free-cash flows in our investments.

We are monitoring our investments carefully, and we are investing alot in the business, because we see large opportunities.

We follow cycles, and pull back to see if the model is working.

For the long term, we pursue great customer experience and free cash flow in our investments.


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