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Breakingviews: Priming Amazon customers

Thursday, March 13, 2014 - 03:01

March 13 - Richard Beales and Breakingviews columnists discuss the increase in Amazon Prime’s cost and how the company hopes to change customer behavior.

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Amazon is upping the coast of its annual free shipping service prime from 79 dollars and -- to 99 dollars he would. Now if you add that up and you assume they have twenty million customers -- 400 million dollars of extra revenue might even before fundamentals of extra profit which is will they made Dustin wrote but you'll you'll think -- the -- The point. On the thing is that Amazon's worth you know 170 -- centers that -- billion dollars even if it made you know four times the profit wouldn't come close just its valuation. But investors chemical hundreds of times -- -- exactly and if you also look at the numbers it. Did she used to serves 2005. Right barely covers the cost and and it was Clinton and that ten dollars if they just -- just that for the cost inflation -- 86 dollars it's obviously not really doing. What they are doing their they keep on adding more -- is deprived right and it said before the crimes incredibly effective effective at changing how people shop mean I've noticed that myself you know. When you sign up for the service suddenly start ordering everything and I -- placements simply stopped going to the store so it's it's more like. It's -- attempt to kind of minimize the cost of of -- -- for him to lock people it does it means it's really just the shipping bred -- hope and change concessions in the the big I like as it doesn't cost a lot action. -- -- -- Helps I also like the yes streaming video -- you free yes -- it's patchy in many respects and we service when I think about. Don't have cable I wanna use. Right everybody is there's templates are clearly still an aspect of primary ended -- in Italy it's almost like you joined for whatever reason join in because you've got kids that that kid shows are unique to excellence stream movies are more free shipping. And you've got you've paid the 7999 dollars and think OK you know human nature takes over he says how can they justify this well -- going to Amazon you know that every -- might as well in particular doesn't -- you know there's. Simpson is a risk here. As well right that's about it because of risk that some customers -- by the idea of a twenty bucks and increase the big increase them. That is one and not do this anymore and then give Jeff Bezos who run -- -- and that's a little that that's a risky -- that. There's -- it was lower the price of course they they they simply signing up more more customers they've they've been cage and the numbers but it's that tens of millions we've seen from it could be even more. And we'll -- you go to proactively decide. Not telling -- which is saying it's not like. Could cost that we just don't show up again from. Possibly they were native critic of the excitement that it practically help Saatchi name aspects of seismic analysis of votes -- -- upset sticks -- -- on the other hand. It's twenty bucks what the hell -- not my big difference and you want from Amazon is suspect they might bring in additional revenue from people I mean -- -- -- they might -- a bit. -- is saying it's that the big issue then is getting in getting most everything they can't laziness is always pretty small Smart corporate policy think thanks -- liquidate. We will have more breaking -- for you tomorrow.