Amazon Prime is in some ways is similar to Costco’s membership fees. Costco make the vast majority of their profit on membership fees and largely breaks even otherwise.
Amazon Prime costs $79 a year (in the USA) and provides free 2 day shipping and access to their streaming video content. Amazon doesn’t disclose the numbers of prime members (that I can find anyway) but educated guesses seem to say 20 million (or more). That would be $1.6 billion a year.
Amazon’s net income for the full year was $274 million. Fees for Prime customers were $1.6 billion
continue reading: Amazon Using a Costco Strategy?