Amazon is about to surpass Costco on one crucial measure

Amazon Prime is closing in on Costco, as membership numbers soar.

There are now roughly 80 million Amazon Prime members in the US, as of March 2017, according Consumer Intelligence Research Partners estimates. That's a 37.9% increase from the 58 million members Amazon had at this time last year.

Costco, meanwhile, reported in March that it had 88.1 million total card holding members.

For a long time, analysts argued Costco was "Amazon-proof." In December 2015, Deutsche Bank's Paul Trussell wrote in a note to investors that Costco would remain unaffected by the e-commerce giant due in part to the budget retailer's membership model.

Now, however, Amazon's Prime membership is starting to eat into Costco's business.

cowen & coCowen & Co.

The percentage of US households that only pay for Prime membership has more than doubled over the past four years, from 7.1% in 2013 to 16.2% in 2016, according to a note published by Cowen & Co. last September. In the same time span, the percentage households that only have a Costco membership have shrunk from 14.9% to 9.8%.

A basic Costco membership costs $55 annually, and allows customers to shop at the discount retailer's warehouse-style store, as well as on its website. That fee is going up to $60 on June 1.

RELATED: The 5 best Kirkland items to buy at Costco

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5 best Kirkland products to buy at Costco
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5 best Kirkland products to buy at Costco

1. Kirkland Signature Organic Extra Virgin Olive Oil 

This product is one of a few imported oils tested that met international and U.S. standards for extra-virgin olive oil, according to a study by University of California, Davis. 

Photo credit: Costco

2. Kirkland Signature Bacon

Consumer Reports gave Kirkland Signature Bacon an 'excellent' rating. 

Photo credit: Costco

3. Kirkland Signature Tequila Añejo 

Costco is known for it's superior liquor collection -- and the Kirkland Signature line is a customer favorite.  Kirkland Signature Tequila Añejo received a score in the 'exceptional' range, according to the director of the Beverage Tasting Institute's Tastings.com

4. Kirkland Signature Egg Nog Liqueur

This booze received top marks from Tastings.com, as well. 

5. Kirkland Signature Vodka 

Costco-brand vodka is praised for its great taste and low price.  

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Amazon Prime membership costs $99 per year. While a recent comparison by Business Insider found that Costco's prices were significantly less expensive than Amazon's, Amazon Prime offers additional perks such as free two-day shipping on millions of items, a wider selection of brands and sizes, and free access to books, music, movies, and television shows.

"The risk is that as Amazon continues to improve Prime's value proposition and add more layers to the Prime service, US households could cancel subscriptions for one or both of the Warehouse clubs. At a minimum, the number of consumers opting to just use Costco and/or Sam's Club 'Only' is likely to continue to decline," Cowen wrote in the note.

Amazon has never publicly disclosed how many people are members of the Prime program. However, if estimates of explosive growth are correct, Costco has good reason to realize it is far from "Amazon-proof."

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RELATED: 10 things you shouldn't buy at Costco, Sam's Club or BJ's

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10 things not to buy at Costco, Sam's or BJ's

Diapers

There are many places to buy cheap diapers -- Amazon, Diapers.com, Target, Walmart, and more. Warehouse club diapers are similarly cheap, but their larger packages may not be the best option, especially when buying very small diapers for newborns. The smallest quantity available at Costco in size 1 (which fits babies up to 14 pounds) is 192 diapers. A child might grow out of the size before the package is empty. Smaller quantities available at Target and Amazon -- both of which have subscription services with convenient delivery and discounted prices -- could be a better buy for a fast-growing child.

Photo credit: Getty

Cooking Oil

Vegetable oil and olive oil are often assumed to have long shelf lives, but they're good for only three to five months after opening, according to the USDA. The enormous containers of oil sold at warehouse stores might be suitable for restaurant use, but a single household isn't likely to use enough to get their money's worth. Smaller quantities from the grocery store may cost more per ounce but won't lose freshness and quality before they can be used.

Related: What food freshness dates really mean

Photo credit: Getty

Processed Snacks

Bins of chocolate-covered pretzels and jelly beans may be a good buy based on unit price but can take a toll on your waistline. A large container encourages constant snacking and makes it hard to keep track of exactly how much has been eaten. Buy a more reasonably sized (and lower priced) bag or risk buying a bigger pants later.

Photo credit: Getty

Fresh Produce

Most fresh fruits and vegetables don't last long before wilting or spoiling. Unless intended for a big event (or family), the biggest containers of fresh produce usually aren't the best buy.

Photo credit: Getty

Sunscreen and Lotion

Sunscreen and lotion last up to three years -- but after that (or if they are exposed to heat), they lose their effectiveness. Before buying a multipack you may not be able to use, even in that extended window, check the expiration dates. Better yet, don't buy in bulk so it's possible to use an entire bottle before it expires.

Photo credit: Getty

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SEE ALSO: Amazon's Prime membership is eating into Costco and Sam's Club's territory

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