"There are two types of people in the world: those with Amazon Prime and those without.” - Jason Calacanis
I couldn’t agree more. I have been an Amazon Prime member since October 2010 and the data around my Amazon purchase habits makes one thing perfectly clear: Amazon Prime is a revenue-increasing, lock-in mechanism offered by Amazon that I *love*. Several have argued that Jeff Bezos is a visionary akin to Steve Jobs. That might be true and my “locked-in but I love it” attitude towards Amazon Prime reminds me of exactly how I feel about the Apple ecosystem.
My Thoughts in Video Format
Motivated by my Amazon Prime experience, I was asked to give an Ignite-style presentation recently. For the uninitiated, Ignite presentations are 5 minutes long with 20 slides that auto advance every 15 seconds. To be clear, this was an "Ignite-style" presentation and not a formal Ignite show.
So what can Amazon do with their Prime program to take significant dollars from big box retailers with high overhead? For starters, they could make the Prime program free or significantly reduced. They have tested this idea with a few demographics, most notably students and moms. It’s a simple concept: Provide some demographic data so that Amazon can target you with product specials and the Prime program is free for a limited period of time. In my experience with the Amazon Mom program, a one year trial with Prime is *more* than enough to get someone hooked.
Alternatively, why not ask Amazon customers for as much demographic data as necessary in order to make the program free? Don’t tell Amazon this but, based on my experience, I would give up a tremendous amount of information in exchange for a reduced or free Amazon Prime membership. You can see Amazon moving towards a zero cost model with another notable item: the Kindle. At launch the initial Amazon Kindle was $399. Today? $79 with ads. The Kindle is just a mechanism for the purchase of books. Amazon is not making money on the Kindle just like I don’t believe they are making money on $79/year Amazon Prime memberships. They are making money because I have diverted a significant amount of household spending in their direction. Prime was just the motivator.