Amazon.com (NASDAQ:AMZN) has been hinting at a price increase for its Prime service for some time now, and earlier this week, the company finally made it official, raising the price of membership from $79 to $99. The company has been putting off a price increase for some time now, despite the rising costs of fuel and delivery.
In this video, Motley Fool consumer goods analyst Mike Finarelli says that as a Prime subscriber himself, he sees the value proposition of the company as one that still leans heavily toward the consumer, as Amazon continues to add sellers that allow it to offer a massive range of goods and services, and doesn't see a $20 increase as one that breaks the bank for most members. As an investor, he sees this move as potentially bringing in up to several hundred million in additional revenue, which could fall toward the bottom line considering the low-cost nature of Amazon's operations.
So, is Amazon destined to bury traditional retail?
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Mark Reeth has no position in any stocks mentioned. Michael Finarelli has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.