Amazon Prime Members Spend More on the Site – a Lot More
Business + Economy

Amazon Prime Members Spend More on the Site – a Lot More

REUTERS/Jason Redmond

Amazon Prime can be a pretty good deal for customers who take advantage of the free shipping and streaming video service, but it’s also a very good deal for Amazon.

New data from the Consumer Intelligence Research shows that customers who spend $99 for an annual Prime membership go on to spend an average of $1,300 per year with the retailer, nearly double the amount spent by non-member customers.

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Prime and non-prime members spend about the same amount of money on each purchase and buy the same number of items at once, but Prime members shop on the site nearly twice as often -- 25 times a year -- as non-prime members. “Amazon Prime membership encourages much more frequent shopping, likely because the free shipping benefit knocks down a key barrier to buying online often and makes Amazon their first stop for online purchases,” Mike Levin, partners and co-founder of CIRP said in a statement.

The number of people signing up continues to grow, as well, with CIRP estimating current U.S. membership at about 63 million, up 35 percent from the previous year. That amounts to more than one in three American adults, although some members may be under 18 and many people share a membership with others in their household.

This spring, Amazon allowed people to pay for Prime membership on a monthly basis, and about 28 percent of Amazon Prime members spend $10.99 per month for that option.