Verdict Is In On Amazon Prime Program

One month ago, I wrote the post at the link below supporting a potentially incredible new program that Amazon started offering named Amazon Prime. In this post, I encouraged everyone to sign up for the free 90 day trial that is being offered.

My Money Blog – Review of Amazon Prime Program

However, after giving the free trial a go, I regretfully have to withdraw my support for this program.

Before I explain my reasoning for this, let’s do a quick recap on what the features of the Amazon Prime Program are. Essentially, what happens is that after the free trial ends, you pay $79 per year to Amazon, and you then receive the following benefits associated with the service:

  • Unlimited FREE 2-day shipping
  • The ability to upgrade to one-day shipping for only $3.99 for domestic US purchase destinations
  • No minimum order size.
  • You can even share your membership with someone else in your household (they just have to know your birthday).

Why Is the Amazon Prime Program Not Suited To My Needs?

In my first post about the program, I added up the total amount I spent on shipping during the past year to an amount of $101. I was thinking that since the program only costs $79 per year and would give me free shipping, I would recover this initial outlay of cash in savings throughout the year. Boy, was I wrong!!!

After signing up for the free trial, I was anxious to make my first Amazon purchase and use the benefits of the program. However, what I soon found out was that for the most part, the Amazon Prime Program ONLY works for NEW items that are being sold BY AMAZON. Because I principally purchase used items from 3rd party sellers on Amazon, I soon realized that the amount I would save using this program would greatly decrease.

As an example, let’s take a look at a scenario of wanting to buy a Harry Potter DVD. Since you are a penny-pinching consumer, you want to watch the movie, but you don’t particularly need it to be brand new in the shrink wrapping.

A quick Amazon search yields the page result at the link below. In examining the page, you can either 1) buy the DVD brand new from Amazon for $9.49 (and get free 2 day shipping with Amazon Prime) or 2) buy the DVD used for $7.10 + $2.98 shipping = $10.08. As you can see from the used DVD search results, none of the used products qualify for the Amazon Prime program. So, you are really only saving ~ 50 cents overall buy using the Amazon Prime program. This to me, is not a significant enough savings to warrant the initial cash outlay of $79.

Amazon.com – Harry Potter and the Half Blood Prince DVD

This was merely a small-scale example. In the example at the link below, you actually end up spending approximately $6 more in order to buy the new version of the book through Amazon and take advantage of the Amazon Prime Program.

Amazon.com – Jim Cramer Mad Money Book

Even though the Amazon Prime program is not well suited for me, it would be appropriate for the following types of Amazon purchasers:

  • If you are a consumer that demands to buy new versions of everything on Amazon
  • If you are a consumer that wants items shipped VERY quickly (2 day or overnight), and cannot wait for standard shipping.

So, if the Amazon Prime Program is well suited to your needs, just keep your membership active, and you will be charged the normal yearly fee at the end of the 90 day trial. However, if you are like me, and you will not be continuing using the program, you will want to do the following to make sure you aren’t charged the $79 fee at the end of the 90 days:

  • Go to Amazon.com, sign in to your account.
  • Click “Your Account” link in the top right corner.
  • In the “Orders” rectangle at the top of the page, you will see a “Manage Prime Membership” hyperlink. Click it.
  • Then, click the button half way down the page to instruct Amazon to not automatically upgrade your account after the 90 day trial.

Please let me know if you have any questions.

Keep on learning!

Jacob

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