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04/16/2021

Amazon Prime membership at 200 million

Marianne Wilson
Editor-in-Chief
Marianne Wilson profile picture

Membership in Amazon’s Prime service continues to soar.

Amazon Prime now counts 200 million members, Jeff Bezos wrote in his final letter to shareholders. That is an increase of approximately 50 million new subscribers from the beginning of 2020.

“We have 200 million Prime members, for a total in 2020 of $126 billion of value creation,” Bezos wrote. He also noted that more than 1.9 million small and medium-sized businesses sell on Amazon, “and they make up close to 60% of our retail sales.”

Bezos also cited the benefits of purchasing good on Amazon versus brick-and-mortar shopping in his letter.

“Customers complete 28% of purchases on Amazon in three minutes or less, and half of all purchases are finished in less than 15 minutes,” he wrote. “Compare that to the typical shopping trip to a physical store – driving, parking, searching store aisles, waiting in the checkout line, finding your car, and driving home. Research suggests the typical physical store trip takes about an hour. If you assume that a typical Amazon purchase takes 15 minutes and that it saves you a couple of trips to a physical store a week, that’s more than 75 hours a year saved.”

To come with a dollar figure, Bezos valued the time savings at $10 per hour, which is conservative, he said. 

“Seventy-five hours multiplied by $10 an hour and subtracting the cost of Prime gives you value creation for each Prime member of about $630.” 

It’s worth noting that even as Bezos pointed out the disadvantages of physical shopping, Amazon has been aggressively opening brick-and-mortar stores in recent years, including its new high-tech grocery format Amazon Fresh.