Are Amazon Prime Perks Actually Worth The Cost?

From famed two-day shipping to a seemingly endless inventory of products to original movies and television shows, it feels like Amazon is ubiquitous. While not required to use/shop on the website, Amazon Prime, in particular, has increasingly become a staple in many American homes (as of 2022, 76.6 million homes, per Statista). This membership service, which, as of early 2024, is $139 annually or, for those who prefer smaller purchases, $14.99 monthly, provides members with a host of perks and offerings from free shipping to streaming movies to exclusive sales (hello Prime Day). While the perks from Amazon Prime membership can be a great way to make shopping for household goods easier than ever, you might be wondering if this ease is really worth the price tag.

Long story short, even with rate increases and the recent addition of fees for the Amazon Prime Video app, a Prime membership is still worth the money. Perhaps one of the most important things to consider about Prime is that it can be used by an entire family through a feature known as Amazon Household. This allows you to share your Prime benefits with up to six members of your family (two adults and up to four teens/children), making your annual or monthly fee even less when you divide it up among family members. Plus, when you factor in how many more needs an entire household might have over an individual, chances are your Prime membership will more than pay for itself through both the shipping perks and streaming options.

Before diving into the cost-benefit analysis of Amazon Prime, it's important to realize what perks exactly come with the membership. There's no denying that one of the biggest perks of becoming a Prime member is the free shipping, which Amazon has expanded to include free two-day, one-day, same-day, and even two-hour delivery (on grocery orders). However, there's more to Prime than the shipping perks. In 2022, Amazon struck a deal with food delivery service Grubhub to add Grubhub+ benefits for Prime members. This means Prime members now get a year of GrubHub membership perks (e.g., unlimited $0 delivery fees on orders, access to discounts, and even donation matching) for free as part of their Prime membership.

Prime members also get access to Amazon's suite of digital services, which includes things like ad-free music and game streaming (including Luna, Amazon's cloud-based gaming platform) as well as access to ad-free podcasts and a digital library with e-books, magazines, audiobooks, and comics at no additional cost for members. Amazon has also added shopping perks, such as special Prime-only deals when shopping for Whole Foods products through Amazon. Plus, in 2021, Amazon rolled out its "Prime Try Before You Buy" program, which allows you to order and try on clothing, shoes, and accessories for seven days before you have to purchase them. Not to mention, Prime members get access to Prime Day, an exclusive shopping event that happens every July.

For starters, Doug Anmuth, an analyst at JPMorgan, found that when you price out each service provided through a Prime membership, the total worth would be around $1,000 (via Investing.com). This makes an annual $139 bill feel like a bargain. According to a 2022 report from Business Insider, shipping costs for non-Prime members on Amazon were $6 for standard shipping or $10 for two-day shipping (which is the standard for Prime members). At $10 shipping per order, it'd take 14 online orders a year to break even with the Prime annual membership price, this before counting all the additional perks that Prime provides.

If you're someone who frequently utilizes online shopping or someone who lives in an area without as many retail options, chances are 14 orders in a year is an easy benchmark to pass. Plus, when you consider that USPS recently raised its shipping prices (beginning on January 21, 2024), the cost of retailer shipping rates is also guaranteed to rise.

Prime also offers a student membership at a discounted rate of $69 a year (or $7.49 a month). This can be an even more cost-effective option for students who traditionally face tighter budgets. Further, there are also discounted Prime rates for people who qualify for SNAP, Medicaid, and a list of other government assistance programs. Those who receive assistance could be eligible for Prime at a rate of $6.99 a month, making Prime membership and its various perks more accessible to more people.