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What Built Amazon 100 Million Prime Member Army? And, What Happens Next?

 

Amazon’s CEO, Jeff Bezos, has released his latest annual shareholder letter and, in the letter, Jeff Bezos disclosed that Amazon Prime member number exceeded 100 millions mark already. Do we really know what that means? Also, what is most likely to happen in terms of having this ultra strong prime army behind the back for the Amazon as a corporation as a whole?

 

100 Million Prime Members

First of all, we should discuss the number. Do you know how many viewers when a TV show gets and the TV show would deem to be seen as a success? Or we should have said that that TV show would have deemed to be a super start or the life stream for that TV station. Once the figure reaches millions, that TV show can be seen as a success. More than 3 millions then the producer can walk like a King in the media industry. Or, if you wanna use the website traffic as an example we can do that too. If your site has more than couple hundred thousand viewers per day, you really can create an handsome revenue stream out from it and live comfortably with what you have in hand. Once it reaches to the million mark… oh! boy… call yourself a successful business man/woman already.

So… 100 Million Prime Members!!! Also, those 100 million figure are¬†actually paying members. Let’s discuss the financial prowess first. It costs $99 USD a year for the regular Prime Membership per year (we aren’t going to use monthly subscription fee to calculate since it’s going to be even greater than using the annual fee to do the count); however, if you are a student, you can get a discount. The student Prime membership costs $55 USD per year. Just do a rough and quick totting up… let’s say it’s 75% of 100 million members times 99 dollars which will amount to $7,425,000,000 USD. It’s about 7.5 billion USD per year for amazon from the paying membership revenue which is just unheard of in the service provider industry history book.

 

Amazon.com Isn’t the Most Affordable Platform

If you think that you can buy things cheap (or cheaper than other ecom-sites), you are wrong these days. Of course, they still have the pricing match policy but most of the Prime members they shop on Amazon.com isn’t because the price is the cheapest on the planet of earth but it’s because the trust and the smooth shopping process from A to Z that they value the most. Just pay attention to Black Friday Sales in the United States. Most hottest tech gadgets are more affordable from other retailers including Best Buy, Target, Walmart, or some other local players. However, Amazon’s Black Friday sales number keeps climbing each and every single year. Everything just sells by itself if it has the “fulfilled by Amazon” text next to it. Consumers know that they will be taken care of if anything goes awry. They won’t need to deal with some rude customer service reps and ruin their day. It’s just like a breeze in the early Spring morning that even the product sent to you is defective or anything not going as planned, you won’t have that in mind at all. You know Amazon will take a very good care of you. Whenever you have time, just a simple click away and you can get a replacement or a refund. No more lengthy CSR calls, no more unnecessary explanation and phone call transfers, and no more frustrations when your day (especially during the holiday season) is supposed to be bright and shinny but suddenly clouded by the unpleasant CSR calls/chats.

 

Never Waver From the 1st day Online – “Customer Is The Center Of The Amazon Universe”

This is truly incredible since most corporations changes (behaviour-wise) or, at least, slightly swing to the other side of the spectrum when the wind changes. Meaning that when there are more profits on one end, corporations usually choose to stand on that side until the situation changes. They used to have their way around since all those legal terms involved when consumers choose to use their services or purchase their products. However, Amazon never changes, Amazon never quivers, Amazon never wavers. From the 1st day Amazon.com was online, their customer centric culture stays true all the way from top to bottom. Even today that Amazon has all the power to screw customers (legally and rightfully to do so in so many cases), they choose to stand on the customer’s side. This high standard of “customer centric” has never been seen before Amazon. And, even though all the companies in the world have been trying to learn from the best, rarely few businesses even reach to the entry level of Amazon’s culture (Apple perhaps…).

 

What Happens Next?

With those 100 million members, Amazon really does have a foot firmly into so many different (major) consumer services industries such as e-commerce, entertainment, and cloud computing. All of the above are the turfs where the future is heading to. Sure, Netflix is the King of the video streaming. However, Amazon doesn’t need to compete directly with them because they have a massive member base (it happens to be 100 million strong) to support them. Based on the fee Amazon collected from their member army, Amazon can infuse its studio with strong doses financially. Have you ever watched any of the Amazon Originals? We cannot even quickly calculate how many great films (or tv shows) the $7.5b cash (per year) can give to us.

In addition, since Amazon has the power to negotiate a better (maybe not the best) price from its vendors, Prime members know that the price they pay won’t be that far off. In return, they get a peace of mind shopping online. Ask yourself, how important a peace of mind is it when you are shopping online? Or just doing anything in general?

Hence, other players might gain market share with the time passing by; Amazon will still sit on the throne of the e-commerce world. Sure, a prime member might buy a thing or two from Walmart.com or Target.com. However, he/she will definitely make some purchases on Amazon.com. Even if he/she does not do that often, the annual membership fee is already in Amazon’s pocket. The fee isn’t for the shipping, isn’t for the purchasing, or may not even for other services such as prime videos or prime music, the membership fee is for the peach of mind and also for the status to be an Amazon Prime member.

 

Note:

There are other powers come with it (100 million members) such as the ability to advertise services/products to its members or just some business activities which require a massive number of participants in order to move onto the next level.

(The success of the Alexa devices can be contributed to the power of the massive prime member army as well)

For example, getting feedback from a product pre-launch activity. Amazon does not even need to give any financial incentives to prospective participant, the 100 million strong members will be more than happy to do that. A great example is that Amazon’s reviewer army which has been charging Amazon.com with the most valuable piece of assets which is the product review by getting free products from all those Amazon vendors every single day. They are more than willing (and super happy) to do that. Seriously, there is a long line waiting to get into the Amazon reviewer group. Once you get you, you don’t wanna get out. Again, Amazon takes care of its customers including reviewers.