The Curious Case of the Amazon Prime Price Hike

Hi folks, it’s Brad. “There are two kinds of retailers,” Jeff Bezos famously said on a quarterly conference call in 2001, a few days after an influential coffee meeting with Costco founder Jim Sinegal at the local Barnes & Noble. “There are those folks who work to figure how to charge more, and companies that work to figure how to charge less, and we are going to be the second.”

For more than a decade, that Costco-inspired lowest-price-anywhere mentality fueled the rise of Amazon.com Inc.’s reputation. But recently the company appears to be taking a different tack. There are legitimate questions about whether customers are really seeing the cheapest products on the internet, or only the cheapest ones stored in Amazon’s warehouses. And now, for the second time in five years, Amazon has raised the price of its signature subscription service, Amazon Prime. It’s going up to $119 from $99 a year, the company announced on last week’s quarterly call with analysts, a rote ritual that Bezos hasn’t participated in for years.