Before I begin, I just want to mention that Amazon Prime is actually an amazing service, and having been a Prime customer for over 5 years, I have undoubtedly reaped the benefits.
I started using Amazon Prime when I was in college. Before I had a car, it was really convenient to just get packages delivered to your door with 2-day shipping. Whenever I found myself missing something, I would just order it from Amazon.
Plus, I had an Amazon Prime Rewards Visa Signature Card, which gives 3% cashback by default anytime you shop on Amazon for non-Prime members. Prime members, however, get a whopping 5% cashback for Amazon purchases. If I bought $2,400 worth of items on Amazon Prime, I would make back my $120 membership fee purely through cashback.
But it’s not all rainbows and unicorns. Amazon Prime is convenient, yes. But it’s only worth it if you frequently shop on Amazon and fully utilize the other Prime benefits. Otherwise, you may be better without it.
1. It’s All Too Easy To Purchase Things I Don’t Need
Amazon is the everything store. There’s almost nothing that you cannot get from Amazon. With 2-day shipping available on most products, it has become my one-stop-shop to do all my shopping.
But this habit of buying whatever I want whenever I want it is also bad for my financial health. It doesn’t promote frugality. (Ironically one of Amazon’s Leadership Principles is frugality, but having Prime membership definitely doesn’t help.)
By cancelling my Prime membership, I am setting the barrier of purchase higher, forcing myself to think through whether I actually need something, or if it’s just a want.
2. Amazon Isn’t Actually Always The Cheapest
While prices on Amazon are good, they are not always the cheapest. We need to remind ourselves that unlike other eCommerce companies (Walmart, Costco, Target, etc.) who have full control over what they list and sell, Amazon also allows third party sellers to list their products alongside Amazon’s products.
Thanks to the phenomenon of retail arbitrage, third party sellers are buying products for the lowest prices they can find (at retail stores, thrift shops, other online sites) and listing them on Amazon at significantly marked up prices.
These third party sellers take advantage of Prime’s vast user base and convenience to make money off of regular Amazon shoppers. For shoppers who regularly assume Amazon has the cheapest price, they won’t even think twice about searching for a cheaper option elsewhere, and therefore the third party sellers profit—at the expense of you and me.
3. I Don’t Take Advantage of Enough Prime Benefits
Prime Membership is more than just 2-day shipping. They also have Prime Books, Prime Music, Prime Video, and many many others.
I’m willing to bet most people actually don’t know the exhaustive list of what Prime membership offers. I certainly can’t list them all off the top of my head.
I myself don’t use all those services, so I figure I’m not able to take full advantage of my Prime membership. Had I been a user of more of the Prime benefits, I may have kept my Prime membership.
But I didn’t want to force myself to use those services as a justification to retain my Prime membership.
4. I Don’t Really Need Fast Shipping
Sure, fast shipping can be really convenient. But I honestly don’t “need” it. As long as I plan ahead on what I need, I can tolerate waiting longer than instant.
Besides, if I really truly urgently needed something right away, I wouldn’t be able to wait 1 or 2 days. I would go to a physical store and purchase it.
If I’m not going to a physical store, then I can afford to wait. And the fast shipping is nice, but not a necessity.
5. I Don’t Shop On Amazon Enough
No matter how good a deal, a deal is only worth it if you use it. Prime’s pricing is $119/year or $12.99/month.
If I were to use Prime purely for the benefit of free shipping, I would need to purchase $120 worth of shipping costs every year. Assuming an equivalent estimate of $5 shipping cost per order, I would need to shop on Amazon at least 24 times per year.
Plus, even without Prime, as long as my order is over $35, I will be eligible to receive free shipping in most cases. At that point, my Prime membership won’t really do anything to help me save money anyway.
6. Even Without Prime, I Can Still Shop On Amazon
It’s not like Amazon will prevent me from shopping without a Prime membership. Like any business, they will most certainly take my money if I’m willing to pay.
Amazon still allows customers to qualify for free two-day shipping as long as your order has a minimum of $35. As long as I don’t need my order immediately, I can add items I want to the cart, and when I have more than $35 in purchases, I can submit the order.
Again, I want to emphasize that I’m not saying Prime Membership is bad. In fact, it’s pretty good—I’m just not able to take full advantage to make it worth it for myself personally.
At the end of the day, if I find out that I really need Prime, I can pay for 1 month, do what I need to do, and cancel.
Subscription services are really dangerous because they encourage a behavior of sign-up now and forget it later, all while they continue to make money off of you. By the time you realize you didn’t need it all that time, hundreds of dollars will have already gone to waste.
Amazon Prime is simply another one of those subscription services. If you use it—it’s worth it. But if you don’t use it—you’re just wasting your money.
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