With Amazon Prime on sale today for just $72, I realized just how much the service has been in the news recently, and how hard it can be to explain to someone just what Prime is.
The core of Amazon Prime is made up of five features:
- Fast shipping
- Prime Instant Video movie and TV streaming service
- Prime Music with unlimited streaming and cloud storage
- Prime Photos – Amazon’s cloud photo management solution
- Kindle Owner’s Lending Library – Access to 50,000 Kindle books available for free rent
The list of five above isn’t everything that comes with a Prime membership. There’s also Amazon Lightning Deals, Prime Pantry, Amazon Elements and more.
There’s also Amazon Mom which is basically a Prime Membership with 20% off diaper subscriptions, 15% off baby registery items and member-exclusive coupons.
Then there’s Amazon Student, a Prime membership aimed at college students who are looking for deals on textbooks. Notably, it comes with a six-month trial period, far beyond the 30-day trial for normal accounts.
The company also has a tendency to throw in a membership with devices like the Fire Phone. Since the Fire family of products has a tendency to be not-so-good, the fact that they basically exist to get people to join Prime is painfully transparent at times.
It’s all very confusing, and my guess is that most users are like me and basically only use their Prime membership for the shipping benefits.
This confusion is made worse when Amazon adds or pulls features from the Prime without much warning. Recently, the company canned its mobile wallet program and its Amazon-branded diapers. Prime members can get $100 off the Amazon Echo, if they are granted an invitation to purchase it.
The confusion around Prime is a symptom of a larger problem, I believe. Amazon’s device lineups are clear enough, but they way they are presented can be confusing. (Hell, just look at the URLs I’ve linked to in this article. Even finding them all was a pain.)
These devices all exist to further the Amazon ecosystem, and at the heart of that is Prime. In some ways, the service feels like Amazon’s main product, with everything else it does revolving around it.
If that approach sounds familiar, it should, as its taken from Google’s playbook. Google’s core business may appear to be search, but their money comes from display ads on those search results. While the company has services that don’t show ads (think Google Drive), all of them work in tandem to keep consumers in the Google ecosystem, where ads can be shown.
(I’m not judging Google on this point, mind you. This website and my business make their money on advertising. I don’t have a problem with ads adjacent to content.)
Amazon isn’t an advertising company, but they do sell Prime will the same vigor as Google pushes its ads. The company is trying to make it add value to every other product it other offers. There’s nothing Amazon offers that isn’t made better by a Prime membership.
If Prime’s goal was to bring the masses to Amazon’s door, its done its job. While the company doesn’t release numbers, estimates have Prime reaching between 20 and 50 million members. This has led to some problems, however. Here is Wired’s Marcus Wohlsen, discussing Prime’s price increase in 2014:
Even if Amazon does raise Prime’s price to cover those increased costs, it may still lose money. Shipping losses are growing by a rate of nearly one-quarter year-over-year, and Amazon is spending almost twice as much on shipping as it charges, writes Colin W. Gillis, director of research at BGC Financial. The proposed Prime price hike won’t cover that deficit, Gillis predicts. “While raising Prime pricing and pitching ‘drone delivery‘ solutions make good headlines, shipping losses remain a burden on profits.”
If that’s true, I don’t begrudge my Prime Membership jumping to $99 a year, as I save more than that in shipping each year.
And that’s the point of Prime, I suppose. To keep me looking at Amazon first when it comes to shopping. While that makes sense to me, Prime is so much more than shipping, and at the end of the day, I think Amazon should be doing a better job at pitching that. The shotgun approach currently in use leads to confusion and can be downright overwhelming at times.
However successful Prime has been for Amazon, I think clear communication about what it offers would only be beneficial to the company and its users.