Amazon customers should be paying $785 for Prime membership — here's why

  • JPMorgan estimates that Amazon Prime membership is worth $785 annually, versus the $119 that Amazon is now charging customers.

  • The value of the membership has increased 12% since last year, with the addition of new perks like free two-hour delivery of groceries from Whole Foods through Prime Now, the report by JPMorgan said.

  • Prime is the "best deal in shopping," the report said.

Amazon Prime customers are paying a tiny fraction of what the service is actually worth, according to a new analysis by JPMorgan.

Amazon recently raised the annual fee for its Prime membership to $119, up from $99.

JPMorgan analysts analyzed all the perks that Prime membership now offers, including free two-day shipping on millions of items and same-day delivery of Whole Foods groceries, to find out whether Amazon is charging a fair price.

According to the analysis, Prime membership is actually worth far more — an estimated $785 annually — than what Amazon is charging. The value of the membership has increased 12% since last year, analysts found.

Here's how JPMorgan's analysis of Prime's various perks breaks down:



In the report, JPMorgan analysts called Prime the "best deal in shopping."

"Prime delivers such massive scale and features that we believe it would be very difficult for any company to replicate and compete against, and Amazon continues to expand and add more value to Prime by adding new benefits and growing existing offerings," analysts wrote.

In addition to free two-day shipping on 100 million items, Prime also offers one-day free shipping on more than one million items, and access to a vast digital library of videos, books, and music.

The company recently started rolling out free two-hour delivery of Whole Foods groceries and announced new Amazon Key services that allow couriers to deliver packages inside customers homes and cars.

Here's how the value of Prime has grown over the last couple years, according to JPMorgan.



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