Amazon Prime was a promise of free two day shipping for a year at an annual fee of $79. Prior to Amazon Prime you had the option of getting free shipping if you purchased $25 or more worth of products at one time. While the shipping was free, it did take 5-9 days typically.
Amazon Prime was launched in 2006 to reward and encourage frequent Amazon shoppers. Amazon Prime offered two day shipping on everything shipped from Amazon and $3.99 for overnight. Most products sold by third parties still qualified as they were warehoused at Amazon.
Amazon Prime was a great value for frequent customers, it offered free, consistent, quick shipping while offering a large majority of the products you want to purchase on a daily basis at near the best price available. Over the years Amazon Prime started to lose it's focus and ultimately it's value.
The death of Free Shipping
In 2014 is when things started to go downhill for Amazon Prime with the introduction of more "value" but the divergence from what made Amazon Prime, Amazon Prime.
Prime Pantry was launched in 2014, it offered Prime customers the ability to buy grocery store items for a fixed shipping cost. The idea behind Prime Pantry was that Amazon would offer food and grocery products and Prime customers would pay a flat $5.99 per four cubic foot box. While adding grocery store items was a fantastic move for Amazon, it was one of the first ways to deteriorate the value offered by Amazon Prime. Customers pre-paying for for free shipping on everything were no longer getting free shipping on everything. As time went on, more and more products fell under the category of Prime Pantry and could not be purchased without starting a box at $5.99 per box.
Add-on items was another trick up Amazon's sleeve to reduce the amount of qualified "Amazon Prime" purchases. Also around 2014 Amazon introduced the Add-on program that offered low cost items that would be cost prohibitive to ship for free. Instead they required a minimum purchase of $25 to have the item shipped for free. Add-on items are typically $0.99 to $5 and are too cheap or heavy to offer with free shipping. As time went on, more and more items were added to the add-on program and items as much as $10 were falling under this category.
Price Hike #1
Also in 2014, Amazon raised the price of Amazon prime from $79 to $99 a year. A 25% increase in price while offering less and less of what it promised... free shipping. This didn't sit well with a lot of people but it was still worth using if you used Amazon on a regular basis.
Amazon Prime Video
Amazon Prime Video was one of the main justifications of the first price hike. Amazon Prime is now a lot more than free shipping, and we need to charge accordingly. While free stuff is great, many of us didn't care about Amazon Prime Video, like Netflix Streaming, it didn't have a good selection and was mostly old stuff no one really cared about.
Overnight shipping was an upgrade on any individual item purchased for Amazon Prime customers. For only $3.99 you can get the item shipped overnight. This quickly changed to $5.99 and then $8.99 and now whatever the hell they want to charge you. This was one of the great things about Amazon Prime, the ability to upgrade to next day shipping for only $3.99. Now you can expect to pay $5.99 - $11.99 or more per item.
Two day slippage
Around this same time I noticed their two day shipping became more of a "two day shipping sometimes". In the past taking longer than two days to ship an item was extremely rare and if you mentioned it they would give you a credit for $5-10 just for letting them know. Around 2014 the amount of three and four day shipments increased dramatically. While things have gotten better and more consistent again, there was a period of time where two day shipping was more of a lottery.
Subscribe and Save
Subscribe and save was a great program Amazon offered. If you subscribed to an item to have it delivered on a regular basis from once a month to as long as once every six months, you would receive 15% off. This was a fantastic deal, a deal that didn't last long. Many of the items that fell under this category were later moved to Prime Pantry and the discount became a sliding 5% to 15% discount. If you had five subscribe and save items, you would get 15% off all of them, if you had less you would get 5%. Then they removed the 15% discount all together and it was a fixed 5% discount. Now there is no discount at all. Subscribe and Save is now Subscribe and well that's it.
Price Hike #2
Amazon recently announced another price hike from $99 to $119 starting May 11th for new customers and June 16th for existing members. The same problems exist, more and more products no longer quality for free shipping one way or another and more services are being added that more people don't use to justify raising the price.
Is it still worth it?
All and all, many people will still save money using Amazon Prime but it is a frustrating membership program that no longer offers what it was intended for. Fewer items quality for free shipping and most of the services offered to make up for it, are not worth using. If the additional services are useful to you, then you will likely benefit from the program. If not, well hopefully you buy a lot of shit and make up for that.
If the average delivery fee was $10, you would need to order at least once a month to break even. Many Amazon Prime customers order something from Amazon almost weekly, but would you if you were paying for shipping? Not likely. That's the secret behind Amazon Prime and why they were willing to lose money on shipping to hook you into.