If you're not a member of Amazon (NASDAQ:AMZN) Prime yet, you're part of an ever-shrinking minority. The company typically keeps figures like this close to the vest, but earlier this year -- in an uncharacteristic display -- CEO Jeff Bezos gave investors their first peek behind the curtain. In the company's annual shareholder letter, Bezos revealed that Amazon Prime's paid memberships have topped 100 million globally.
Bezos didn't provide any additional color, but an estimated 61% of Amazon customers in the U.S., or about 97 million Americans, are Prime subscribers, according to estimates compiled by Consumer Intelligence Research Partners (CIRP). With Black Friday and the holiday shopping season bearing down, many who haven't taken the plunge may be asking themselves: "Should I sign up for Amazon Prime?"
Not just free shipping
If you're considering finally breaking down and getting a Prime subscription, you should know that there are many more benefits than the free two-day (or faster) shipping, though this is typically the major draw. Sitting at a keyboard to place an order without ever having to leave the house, and having that order delivered within a couple of days, has a certain appeal -- particularly if it means avoiding the melee of holiday shopping.
That said, there are other reasons to join. A membership includes access to Amazon's vast library of movies and television shows available on Prime Video. Cord-cutters can also sign up with a number of other streaming providers like HBO, Showtime, Starz, and many more -- and view them all within Prime Video.
Other benefits abound, including streaming music with Prime Music Unlimited. As the name implies, it provides unlimited access to more than 2 million songs and hundreds of Prime Playlists, as well as discounted plans to Amazon Music Unlimited, which has an even larger song catalog. Prime members get exclusive savings at Whole Foods grocery stores, 5% cash back for holders of the Prime Rewards credit card, and free digital books and magazines from the Prime reading catalog for use on the Fire Tablet, Kindle e-reader, or popular Kindle reading apps that can be downloaded on most smartphones.
The company also hosts the annual Amazon Prime Day, which is billed as "Black Friday in July." The members-only sale offers deeply discounted items, flash sales, and deals on thousands of the site's most popular goods. The 2018 event boasted 36 hours of deals, which included Whole Foods for the first time, as well as significant discounts on many Amazon-branded electronics.
Getting more than it's giving
Amazon isn't giving away all these benefits out of some sense of altruism; the company gets far more than it gives away. According to CIRP data, Prime customers on average spend $1,400 per year, versus the $600 per year spent by nonmembers. It makes sense that once customers have plunked down their hard-earned cash for a Prime membership, they want to be sure to get their money's worth. Forgoing that trip to the store can be as easy as a few keystrokes, and your purchase will arrive in a couple of days.
Research also shows that once someone becomes a member, renewal rates actually improve over time -- 93% of customers renew after the first year, and 98% renew after the second year, according to CIRP.
Just for Black Friday?
It's important to point out that Amazon Prime offers a 30-day free trial, so if you're only going to use Prime to take advantage of the Black Friday offers, a monthly or annual commitment may not be worth it. An annual membership currently costs $119, with monthly subscriptions of $12.99.
There are lots of reasons to like Amazon Prime -- as evidenced by the more than 100 million people who have signed up. But if you're only going to use a membership for Black Friday deals, I'd go with the free trial.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.