Last month, my brother mentioned that he didn’t have Amazon Prime. I was shocked. Did anyone not use Prime? To me, it felt like one of the basic human needs: food, water, shelter, and Prime. But this discussion with my brother opened up my eyes to the fact that maybe, although I had used the service for the last 9 years, the answer to “Is Amazon Prime worth it?” wasn’t as simple as I though. Maybe it wasn’t even saving me as much money as I had assumed.
Then I checked my bank statement, and was horrified to see that Amazon had been charging me almost $13 per month to use its service. (No, I’m not good at checking my account. Don’t judge me.) I thought I had subscribed to the annual plan, which is a little cheaper and also easy to forget because it comes in one lump sum, rather than once a month. But no, there it was — 13 entire dollars every month gone in a flash.
Was Amazon Prime even worth that much? I decided to sit down and do the math to find my answer.
The Pros and Cons of Amazon Prime
First, I’ll go into the benefits and the costs of an Amazon Prime membership, for those who aren’t familiar.
The pros include:
- Free 2-day shipping right to your doorstep (and free same-day shipping in some locations)
- Prime Video and streaming music
- Subscribe & Save discounts
- Free access to a library of eBooks
The cons add up to:
- Cost of $12.99 paid monthly (or $155.88 annually), or $119 paid annually
- Incentivizes impulse shopping
- No in-store pick-up option; since Amazon doesn’t run brick and mortar locations, if an item is needed the same day, you’ll need to pay more for express shipping
- Wastes lots of extra cardboard boxes
So, with all of the costs associated with Prime, is it really saving me money? A little spreadsheet action helped me to compare Amazon’s prices to its competitors’ to get the scoop.
A 6-Month Review of My Purchases
I reviewed every item I bought from Amazon in the last 6 months, i.e. since January 2019. In that timeframe, I bought 19 items using Prime. I’m not sure if that makes me an average Prime user or not. I’m guessing that I use it a bit less than the Average Jane.
For each of these items, I categorized them into “needs” and “wants.”
A “need” was defined as anything related to keeping a clean, healthy, and affordable lifestyle. So shampoo, bathroom cleaner, or a replacement part for our French press so we can make coffee at home (in our house, coffee is a need). Things like that. A “want” included anything related to a hobby or a non-essential life activity, like gardening.
I ended up with 12 needs and 7 wants. That meant I was mostly using Amazon Prime to buy essential items for my home or my wellbeing, and it seemed I was pretty good at controlling my impulse purchasing through Amazon. I gave myself a quick pat on the back.
Then, I price-matched each item to see if Amazon was, indeed, the most affordable seller.
I was curious if we had all just gotten in the habit of using Amazon instead of shopping around for the best deal. It turned out that, yes, Amazon’s prices were better than competitors’ on 16 out of 19 products. But here’s the thing: The majority of Amazon products are better priced because of the lack of free shipping at most of the other stores. If we don’t include the shipping costs and assume that we would bundle purchases together to qualify for free shipping at, say, Target, then only 10 out of 19 cost less on Amazon. In fact, a keyboard I had bought on Amazon was priced $7.00 cheaper at Target.
It seems shipping is a big reason why Amazon’s prices remain competitive.
How Much I Saved vs. Spent
Overall, I saved $81.62 by using Amazon Prime (and its free shipping) rather than other online options. This sounds great — you could theorize that I might even save $160 in a year.
However, the numbers don’t look so pretty after subtracting the cost of a Prime membership. Amazon charged me $12.99 per month, for a total of $77.94 over 6 months. The savings on my needs and the “essential wants” — the items I would have bought with or without Amazon — totaled $66.39. When I subtracted the cost of Amazon Prime, I was $6.61 in the red. If I had subscribed to the better-priced annual Prime membership, I would have come out $11.83 ahead.
The end results were more even than I expected.
Plus, how many wants would I not have purchased without Amazon’s speed and ease? I counted three items that I would not have bought without the One-Click Purchase option on Amazon — a beekeeping suit, an extra bag of plant food, and a pouch of organic chamomile tea. These items cost $57.65 together. So, when I add together my actual savings and the frivolous money I spent because Amazon made me (I take no personal responsibility), I’m actually $64.26 in the hole.
Is Amazon Prime Worth It?
I’m going to offer one of those annoying answers: It depends.
For me, it’s not worth it. I don’t use it all that often, and I can find most of my essentials at the same or a close-enough price at other stores. It’s not a big deal for me to drive to a store, and I prefer that to wasting so much cardboard. In my experience, the monthly fee is not made up by the net benefit. So I canceled it.
But if I was incredibly pressed for time, and I used Amazon a lot, I could see it being worth the free shipping for items to show up at your doorstep. It would be interesting to compare my 6-month breakdown to another member who relied more heavily on Amazon.
I had always thought of Prime as mandatory, a thing that everyone had to have, until I got rid of it. Honestly, I feel a little more free, a little lighter. I enjoy purchasing items from other stores, and from smaller mom-and-pop shops when I can. Plus, it’s not like I’m banned from using Amazon because I’m not a Prime member — I just have to qualify for their $25 limit to get free shipping.
Who else decided to give up their Prime benefits, and why?
Tiffany Verbeck is a freelance writer and storyteller who helps small businesses and entrepreneurs tell their brand story. She runs a professional blog on personal finance at www.tiffanyverbeck.com and a personal blog on growing up in Indiana called Midwestern Transplant. She can be found on Twitter at @tiffanyverbeck.
Image via Unsplash