The cost of Amazon Prime has increased to $119 per year and even die hard Amazon shoppers may not be saving money.
We compared shipping costs and prices for over 1,200 products and were surprised to learn how many items you would have to order to make Amazon Prime worth it.
The Rise of “Free” Shipping
For online shoppers free shipping has become something of a “constitutional right”, with Amazon Prime acting as our founding father.
But is anyone actually saving money?
Free shipping is so paramount that 9 out of 10 shoppers say its “the top most incentive to shop online”.
But as the saying goes, “There ain’t no such thing as a free lunch”.
Amazon is, as of 2011, a profitable company which means the cost of shipping is probably factored in somewhere.
When are you really saving money?
Two criteria have to be met in order to actually save money on shipping through Amazon Prime.
- When you don’t already qualify for free shipping
- When Amazon + free shipping is the cheapest deal
When you don’t already qualify for free shipping
Amazon recently decreased their shipping minimum from $49 to $25, which means anytime your cart is over $25 you qualify for free shipping regardless of whether or not you have Amazon Prime.
Amazon also now offers free holiday shipping from November 5th through December 18th, so any purchases during those dates will include free shipping no matter what.
When Amazon + free shipping is the cheapest deal
Most people reasonably assume that every time they order with Amazon Prime they save money on shipping. This is not true.
In the first example below, an Amazon Prime user would be saving money. In the second example, they would not.
Here you would be saving money because the cost of Amazon with free shipping is the cheapest option available.
So does that mean anytime you purchase something under $25 (minimum free shipping criteria) you save money on shipping? No.Amazon usually just adds the shipping cost to the item.
Amazon usually just adds the shipping cost to the item.
More often than people realize, Amazon’s price with free shipping is more expensive than buying on another website altogether.
In this example, having Amazon Prime wouldn’t save you money because it’s cheaper to just buy on Walmart altogether. What good is free shipping if it still costs you more?
How many purchases make Amazon Prime worth it?
To figure out exactly how many purchases you would need to make in order to make Amazon Prime worth it we sampled over 1,200 products across hundreds of categories (kitchen, appliances, sports, health, books, etc).
Each of the products met the following criteria:
- The exact product was listed on another site, such as Walmart, eBay, and BestBuy
- The product cost was under $25, meaning it would only qualify for free shipping with Amazon Prime
With our sample size of over 1,200 products, we found that nearly half the time it was cheaper to buy on another website.47% of the time Amazon Prime had the more expensive price Click To Tweet
Statistically, this means your Amazon Prime account only saves you money on almost every other purchase.
To justify the Amazon Prime cost of $119, with an average shipping cost of $5.99, you would have to buy over 37 items per year!
That comes out to more than 3 purchases a month.
Check to see if you made close to 40 purchases last year.
If you are ordering significantly less than 39 items a year on Amazon that are under $25, you probably should forgo signing up for Amazon Prime.
However, Amazon Prime does offer other perks that we cover in depth in our articles here:
- Does Amazon Prime Really Save you Money at Whole Foods?
- Is Amazon Prime Video worth as much as Netflix?
- Does Amazon Prime day live up to the hype?
How to Get the Most Bang for Your Buck
One of the biggest findings of our study was that you can save money on 47% of you Amazon orders, under $25, by finding a better price elsewhere online.
Price comparison shopping can be a long, manual process, especially because it’s hard to know where to look.
Luckily there are tools that will automatically search the whole web for you.
We recommend using the free Chrome extension Compass that has saved Amazon shoppers thousands by finding them cheaper prices.