Do Amazon Prime Members Really Spend More Than Non Members?
Amazon Prime is an exclusive, members-only program that offers online shoppers access to select content, cash-back opportunities and fast, free shipping.
It’s also a one-way ticket to more purchases.
According to recent data, Amazon Prime members spend almost twice as much as non-members do, clocking in at nearly $1,300 in purchases every year.
FREE STUDY: Amazon Consumer Survey 2017
Consumer Intelligence Research Partners reports that Prime members shop about 25 times annually on the site, versus non-Prime members’ mere 14 purchases.
That membership is growing, too.
Amazon Prime’s current membership sits around 85 million right now—a whopping 35 percent higher than it was just one year prior and more than double its numbers from 2015.
Today, one in three U.S. adults and 63 percent of all Amazon shoppers are Prime members.
Though the program’s recent growth will certainly line Amazon’s pockets, it also presents a “prime” opportunity for retailers in today’s competitive ecommerce space.
It’s simple, really: Put your products in front of Prime members, and open the door for more customers, more sales and more profits.
What is Amazon Prime?
Launched more than 12 years ago, Amazon Prime was a true anomaly at the time. In fact, many in the business world thought CEO Jeff Bezos was off his rocker for it.
(VP Greg Greeley told the Seattle Times, “Skeptics thought we were crazy. At the time, they said ‘Why would anybody want to spend that much for shipping?’ and ‘How the heck are they going to be able to afford it?’”)
Sold for most of its lifespan at the annual price of $99, Amazon Prime has always included free two-day shipping—its centerpiece offering—but has since expanded into exclusive TV and video content, Kindle books, music, podcasts, unlimited photo storage and so much more.
The company also launched a monthly version of Prime last year, which costs members $10.99 and can be canceled anytime.
The Power of Prime
The true power of Amazon Prime lies in the loyalty it spurns.
Data has shown time and time again that not only do Prime members buy more than their non-member counterparts, but they continue to up their purchases every year they remain a member.
“What makes competing with Amazon a significant challenge for existing Google Shopping advertisers is their trusted brand and Prime membership program,” Pat Petriello, Head of Marketplace Strategy at CPC Strategy said.
“Many online shoppers already have a deep loyalty to shopping on Amazon and are Amazon Prime members, which makes them much more likely to click on a products being advertised by Amazon.”
“If a shopper knows they can get free two day shipping and the unmatched customer service experience they get with Amazon, they will often choose them over lesser known retailers.”
Maybe it’s the free shipping or the ease and convenience of its subscription services, buy buttons or one-click ordering, but data from research firm Millward Brown actually shows that the longer a buyer is a Prime member, the more they’re apt to spend.
Prime Members who joined in 2014 spent just over $2,100 in 2015.
Members who joined two years earlier? They spent a whopping $3,091—nearly $1K more.
Over time, it’s estimated that members increase their Amazon Prime spend by about 12 percent every year.
The logic is simple when you think about it: Customers are paying for Prime—and they want to make use of that investment as best they can. Instead of wasting dollars at another ecommerce site, where they’ll likely pay $10 or $20 in shipping, they opt to pay $2 or $3 more for a product through Amazon, where shipping is covered and the product arrives in just days.
Prime also pays for itself in spades during the busy holiday seasons. For shoppers who don’t want to brave the malls or need a last-minute gift for a loved one, Prime offers a quick, easy and affordable way to buy—no traffic or long lines necessary.
Selling on Amazon Prime
At this point, you’re probably sold on Amazon Prime. So how do you get started?
You’ll first need to become a seller on Amazon and start listing your products (here’s a great post on how to do that).
Once you’re all set up, you’ll have to let Amazon take charge of your order fulfillment. That means they’ll handle the processing, picking and shipping of all your orders in one of their many warehouses across the world. This is crucial, as it’s the only way Amazon can guarantee its lightning-fast shipping times—the cornerstone of the Prime program.
If it sounds a little scary, don’t be too worried; Amazon will also handle your returns, refunds and customer service—a big bonus if you’re light on staff or time.
Fulfillment by Amazon costs anywhere from a few dollars to a few hundred per product. Check out the full breakdown of costs here.
Remember to weigh the benefits when looking at the numbers of paper; Prime opens your business up to millions and millions of potential customers every year—customers who are downright proven to spend more than the average online shopper.
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