Amazon Is Primed

Amazon.com (NASDAQ: AMZN  ) has now made it official: The company has raised the price of its Amazon Prime membership service from $79 a year to $99 a year. Amazon had initially suggested that such a possible price increase could be anywhere from $20-$40, but in this video from Thursday's Investor Beat, host Chris Hill and Motley Fool analyst David Hanson discuss why it wasn't the fact that the increase came in at the low end of this range that caused the stock to rise a bit on the news.

David points more to the idea that this just simply means more cash flowing into the business. While some have compared this to the Netflix debacle, where it raised rates and consumers fled, Amazon's incredibly robust moat means it has more than enough brand strength to raise rates without losing Prime members. However, while David notes that this will be an incremental boost to the company's bottom line, he won't be buying just on this news alone.

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  • Report this Comment On March 14, 2014, at 9:42 AM, dstb wrote:

    Apparently the stock market likes the Prime increase. If you buy much of anything from them it is still a steal.

  • Report this Comment On May 21, 2014, at 7:57 PM, tilepat wrote:

    I love amazon for many reasons. Their website is easy and intuitive. The selection of items is immense. (Not only amazon fulfilled items,but those of marketplace sellers as well.) The return policy and procedure is great. I use the customer reviews all the time even if I don't buy the item from amazon. This is still good for them. It gets me to their site. We signed up for Prime just based on our yearly purchases to save the shipping. You get free 2 day shipping. It was a no brainer for that alone. I have yet to use the prime free video as I've been watching netflix. May drop the netflix in future but not yet.

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