When Amazon (NASDAQ:AMZN) first launched its Prime service, it offered free two-day shipping for $79 a year. At the time, that service was novel, maybe even revolutionary. It made it possible for members to order whatever they wanted without thinking about the cost of shipping.
That's still the top perk offered to Prime members, who now pay $119 a year (or $12.99 a month). Free delivery isn't the only benefit that comes with Prime. The service offers streaming video, free music, discounts at Whole Foods, and various other discounts.
For many members, however, free two-day delivery on over 100 million items remains the biggest draw. If that's why you keep signing up for another year, it might be worth considering whether you're wasting your money. Here are some possible reasons to drop the service.
1. You don't use it often
It's liberating not to have to think about paying shipping fees. If you're the type of person who places Amazon orders as soon as you notice you need something -- resulting in multiple deliveries per week -- then it's clear you're getting a good value for your $119 a year.
Some people, however, have more ordering discipline. They make lists and ponder whether to buy something online or in-store, placing fewer digital orders, but larger ones. That type of shopper might only want to pay for Prime if they order multiple times per month.
If you order less than that, you should consider other benefits in the package. For example, if you order once or twice a month, but watch Prime Video regularly or shop at Whole Foods often, you're probably still getting a good value.
Check out the latest Amazon earnings call transcript.
2. Walmart could replace it for you
Walmart (NYSE:WMT) offers free two-day shipping on qualifying orders over $35, without requiring any sort of membership fee. Its selection is much smaller than Amazon's -- a few million items compared to over 100 million -- but that may not matter to you.
Figuring out whether Walmart can replace Prime for you requires doing a test. Attempt to make a switch to see if either the $35 threshold or the selection causes you problems. You may find that with some minor substitutions, Walmart's free service works well enough without being too much of a sacrifice.
3. Your ordering habits have changed
Back when Prime launched in 2005, books and CDs were still big sellers. Now, many consumers have switched to digital solutions for books and music. That may have changed how often you order shipments from Amazon without you really noticing.
If you're not buying household items from Amazon -- such as groceries, toiletries, or cleaning products -- you may not be taking regular advantage of the free shipping. It's also possible that you have switched some of your ordering to other services like Instacart, Target's same-day delivery offering, or even Walmart's curbside pickup.
Do an audit
Paying for something you don't use doesn't make sense. If you're on the fence, consider your options. For one, you could shift more of your shopping to Amazon to better get your money's worth. That's not a bad idea, since the online retailer offers both convenience and good pricing.
The other option, of course, is to drop Prime. Amazon still offers free shipping on orders of $35 or more -- they just won't necessarily arrive in two days. It's not always an easy choice, but you should only pay for Prime if it clearly offers you $119 a year in value -- and for some people, it just won't.