One of the best decisions Amazon ever made was creating a Prime membership program. Any argument otherwise is shattered by the numbers—according to data collected by Consumer Intelligence Research Partners, LLC (just CIRP from here on out), there are now 80 million Amazon Prime members living in the United States. Not only is that remarkable figure, but they're outspending non-Prime members by almost a 2:1 ratio.
CIRP figures that Prime members spend on average around $1,300 per year, compared to about $700 per year for non-member customers. That is a big disparity and it goes to show the value that consumers place on free two-day shipping, which is one of the primary perks of being a Prime member. It could also indicate a desire on the part of Prime members to justify paying a subscription fee.
What is also remarkable is the level of growth Amazon is seeing. As of the end of March, CIRP estimates that 60 percent of Amazon's customers in the U.S. are Prime members. And that 80 million figure is up from 58 million a month prior. Going back even further, Amazon has managed to double the number of Prime members in the U.S. since March 2015 when the tally sat at just over 40 million.
"Looking back, Amazon Prime membership doubled in the US in two years," said Josh Lowitz, Partner and co-founder of CIRP. "While slower growth is expected as it reaches natural limits, Amazon had a surprisingly strong quarter. Membership grew 8 percent in the most recent quarter, compared to 7 percent growth on a smaller base in the year-ago quarter ending in March 2016."
Amazon has taken several steps to make its Prime members more attractive to customers. While free expedited shipping on millions of items was one of the initial perks and remains the biggest draw today, there are many other benefits, such as unlimited cloud storage for photos.
A Prime membership runs $99 per year, with new members getting a free 30-day trial. Customers can also opt for a monthly subscription that runs $11 per month. That works out to $132 per year, but is convenient for people who mostly shop around the holidays.
Students have it even better. Prime memberships for students runs $49 per year, and comes with a six-month trial.