Now that it costs $20 more, a look back through all of 2013's purchases to see if an Amazon Prime membership pays off
I've paid $79 per year for an Amazon Prime membership for the past five years or so, and I've always wondered how much (if any) it's saved me. Now that the price is going up to $99 a year, I thought I'd run through all my purchases from 2013 to see what the difference would have been if I hadn't shelled out for Prime last year.
Quick Prime primer: You pay Amazon (now) $99 a year, and in return, you get free two-day shipping on a vast selection of what Amazon sells, and you can step up to overnight shipping for $3.99 per item. Amazon also includes a Netflix-like streaming video service containing 40,000 movies and TV shows - some popular, most not. You also get the ability to digitally borrow half a million eligible Kindle books one at a time. More info here.
This is all very unscientific, back-of-the-napkin math, but here are some stats and assumptions about my 2013 orders.
- Total number of orders placed in 2013: 76
- Number of Subscribe-and-Save orders: 13
- Total number of shipments (orders + Subscribe-and-Save): 62
- Total number of orders totaling less than $35: 31
I placed 76 orders last year, but some of these orders were multiple different orders placed on the same day or Subscribe-and-Save orders, which are basically discounted subscriptions to items that get shipped out on a set schedule (paper towels, batteries, detergent and things like that).
So when the dust had cleared, I ended up getting 62 shipments last year. Of those shipments, exactly half were orders that totaled less than $35. Amazon offers free shipping if you spend $35 or more.
Extra Shipping Charges:
- Number of items overnighted at $3.99 per item: 5
- Number of non-Prime orders: 1
- Total 2013 shipment costs (Prime + extras): $104.44
I had five items overnighted at $3.99 per item ($19.95 total), I paid $79 for the membership, and I bought one item that wasn't eligible for Prime shipping. It was a t-shirt that carried $5.49 in additional shipping costs. I have no regrets about buying this shirt. None whatsoever.
So: $19.95 plus $79 plus $5.49 comes out to $104.44 - the total amount I paid for shipping last year on all my Amazon purchases.
Cost of Overnighting the Same 5 Items Without Prime:
- Pair of shoes: $18.98
- Wireless weather station: $18.98
- Wig I bought but never used: $18.98
- Another wig I bought but never used: $18.98
- Wireless keyboard: $20.97
- Total overnight shipping costs if not for Prime: $96.89
I would have incurred $96.89 worth of shipping costs just for the five items I chose to overnight. That's before even getting into how much I would have paid in shipping charges for orders totaling less than $35.
However, I can look you straight in the eye and tell you that there's no way I would have overnighted a single one of these items if I hadn't been able to do so for $3.99 apiece. I probably wouldn't have purchased any of these items from Amazon in the first place. The two wigs (see above photo) are my biggest regrets for several reasons, but I know deep down in the cockles of my heart that having them on-hand will someday pay off in spades. I didn't need to overnight either of them, though.
Standard Shipping Costs Without Prime:
- Total standard shipping costs on orders under $35 if not for Prime: $112.15
I fudged the numbers a bit here: I had a few orders that were shy of $35 by less than a buck, and a smattering of orders staggered within a day of each other. In a non-Prime life, I would have found something dinky to make a $34 order clear $35 and I would have been more vigilant about placing larger orders that qualified for free shipping. So I didn't count those orders in my 2013 totals. But for the rest of the one-off, sub-$35 items I ordered, I would have paid around $112 in shipping costs.
Assumptions, Advice and Conclusion:
I'm surprised at how close these two realities are. In a Prime life, I paid $104.44 in shipping charges; in a non-Prime life, I would have paid $112.15 in shipping charges.
In my case, I actually have to think a bit about whether $99 is worth it. Prime was a no-brainer for me at $79, but if I buckled down and made sure to order things only in $35-and-up clumps, I could conceivably cut shipping costs out of the equation altogether. (I'd still pay $5.49 extra for that shirt - all day long. No regrets.)
What such a scenario doesn't take into account, of course, is that Prime offers two-day shipping, whereas standard shipping is listed at five to eight days. If you live in a populated area that's relatively close to an Amazon distribution center, however, I can tell you that a standard shipment generally shows up in three days. At least, that's been my case (I live in Boston).
It also doesn't take into account the free movies and TV shows, or the free Kindle books. You could make the argument that if Amazon has the same stuff you want to watch as Netflix does, you could save $8 a month on a Netflix membership and basically offset the yearly cost of Prime. I also happened to read more Kindle books this year thanks to my Prime membership, but I can't argue that I would have paid full price for any of them otherwise.
My colleague Brad Tuttle lays out 5 ways to skirt paying $99 for Prime, the least cumbersome being to sign up for an educational discount if you have a .edu email address, or being diligent about placing $35+ orders. I'll also add that you can share a full-price Prime membership with four other people (Prime members: see the "Invite a Household Member" section on this page), so round up four friends - sorry, "household members" - and everyone can chip in $20.
And now the big question: Will I be re-upping my membership at $99 this time around?
Yes. Yes, I will. Being able to pay $4 to overnight a wig I'll probably never use is worth it to me. So is not having to look around for stuff to pad a $34 order. The two-day shipping on everything else, coupled with the video and e-book extras is icing on the cake.
But finally running the numbers after all these years has left me feeling less like Prime is a must-buy, especially now that it costs $99. If the price goes up any higher, I think that'll be it for me.