hiw does amazon prices so many products under its prime membership. just for signing up for prime you get acees to delivery, photos, music, books, videos, whole food discounts etc, to name a few. so simply put, what is the value proposition of offering a umbrella product like amazon prime?
Not just retention, prime customers spend way more than normal customers. It’s an addicting thing to order every damn small thing just bcoz u have free shipping!! 2011-2016, I was not a prime member and I think I spent a total of $500. Just 2017 alone I spent over $2000 bcoz I was a prime member.
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Agree with comments but how would you quantify it? Let’s say amazon builds another service tomorrow, what would a data driven company look at to decide if it should be part of prime or not? Isn’t the company devaluing it’s prime earnings with this approach? If prime model is so successful, is there any other company replicating this complex model? Why or why not?
Long term retention of a customer is far more valuable to the company. Offering those services as part of the subscription and 2 (or even same day) service is how they retain customers long term. People stay for the "perks".