Is Amazon Prime really worth it?

After recently renewing my Amazon Prime membership, I noticed the price had gone up and I started wondering if it was still worth it.

Memberships like these make sense for lots of reasons. Just look at Costco—a perfect example where paying for a membership can be worth it for thousands of Canadians.

The Amazon “Prime” effect is no different, and for some, their membership has metamorphosed into a marriage contract of sorts, with consumers promising to be loyal and to spend more quality time (read: money) on their site. Some of us just might not realize it yet.

The “Prime” effect

It turns out that I am a perfect example. To investigate, I looked at my Amazon order history and decided to crunch some numbers.

In 2016, I didn’t have Amazon Prime. I thought of Amazon as the last-resort for cheap items I didn’t want to pay a higher retail price for at brick-and-mortar stores in my town.

The total money I spent at Amazon in 2017 was $744.03.

The next year I decided to try out Amazon Prime. My spending doubled.

In 2018, I spent $1,499.37.

And in 2019, I spent $1723.32.

By looking at how my spending has increased, it’s clear to me that I no longer see Amazon as my last resort. It’s become my go-to for pretty much anything, and I’ll only shop somewhere else if Amazon doesn’t have what I’m looking for, or if I’m (somehow) in the mood to walk around an over-lit and over-crowded mall.

And since I’m paying over $80 per year for it, I know I’m going to shop there first to make my investment worthwhile.

I used to buy things like board games at Toys R Us, books at Indigo, and work clothes at Mark’s…but now all of that money is going into the hands of Amazon.

Amazon Prime: is it worth it for you?

With all that being said, is Amazon Prime worth the subscription fee? Let’s take a look at what this service has going for it.

Speedy 2-day delivery

Perhaps the biggest perk of having an Amazon Prime membership is free 2-day shipping, with some regions being eligible for 1-day delivery.

If speedy delivery time is your biggest concern, Amazon Prime could be a blessing, although not all items are eligible. So it’s a gamble: will the item you’re looking to purchase qualify for it? If not, is it really worth it?

Amazon streaming services & Amazon Music

In addition to giving you fast and free shipping, your Amazon Prime membership includes the Amazon Prime streaming service, which is like Netflix, only with different (and currently fewer) options. If you use video streaming services, then this alone could make the subscription worth it.

And this applies to Amazon Music, as well. With this you can save on the cost of a Spotify subscription, for example, although Spotify is still a more robust option.

Membership cost breakdown

An Amazon Prime subscription is currently $7.99 a month (or a flat annual fee of $79) in Canada, which, if you pay monthly, works out to just over $95 a year, before taxes.

That’s almost $100 a year, which feels like a lot. But let’s take a look at what you get, and how other options compare. For this we’ll assume we’re only ordering 1 book-sized item from Amazon per month.

ServiceAlternativeAmazon Prime
Shipping from Amazon$3.99 per order (est average)Included
Music streaming$9.99 per month (Spotify)Included
Video streaming$13.99 per month (Netflix on multiple devices)Included
Monthly total$27.97$7.99

 

So you can see that Amazon Prime is a steal of a deal if you actually use it to replace other music and video streaming subscriptions.

If you’re keeping those other subscriptions, however, the free shipping may not be worth it on its own, unless you’re having things shipped relatively often.

What does this mean for the competition?

We’ve already seen the impact Amazon has had on local bookshops and small retailers, and it hasn’t been good. And Amazon is always expanding its reach with things like its video streaming, music streaming, and e-Book services. More recently, they’ve expanded into grocery delivery through the acquisition of Whole Foods, and I’m sure their expansion is far from over.

It’s easy to see how an Amazon Prime membership leads to increased loyalty and spending. With guaranteed free delivery, low prices, and easy returns, most members will default to ordering most things from Amazon as a matter of course. The added free streaming services are just a bonus, giving members a way to save money by cancelling other, competing subscriptions.

I’m sure they’re not finished expanding what Amazon Prime has to offer. And, at the end of the day, if you make full use of what it already includes, it’s a pretty clear way to save some money.

About Stephen Weyman

Stephen Weyman is the founder of HowToSaveMoney.ca, a website dedicated to... well, you can probably tell from the name. He covers credit cards, travel, shopping tips, food, and even student savings strategies.

He's also the founder of creditcardGenius, a website that rates credit cards in real time based on the user's priorities, and launched the first Canadian credit card comparison app on Android and iOS.

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