Amazon Prime membership system and consumer behavior analysis

Amazon’s Prime membership system is divided into formal members and student members. Members can choose annual or monthly payment methods, and student members enjoy half-price discounts. According to current data, the conversion rate for Amazon Prime members is as high as 74%, while the conversion rate for non-members is only 13%. Up to now, the number of members of this system has exceeded 100 million, and the number of members in the United States alone has reached 95 million, accounting for approximately 29% of the total population of the United States.

In terms of consumption, data in 2018 shows that the average consumption of Amazon Prime members on Amazon was US$1,400, compared with only US$600 for non-members. This shows that although the number of non-members is about twice that of members, the spending power of Prime members is more than 5 times higher than that of non-members. This phenomenon shows that most of the consumers who shop frequently are Prime members and they are more willing to buy Prime products. Therefore, providing buyers with products delivered by FBA (Fulfillment by Amazon) has become an effective strategy to increase sales.

Further analysis of Prime members in the United States shows that about 35% are members who choose to pay monthly, equivalent to 33 million people. The annual membership fee for Prime is set at $119, while users who choose to pay monthly will pay $156 for the entire year. This payment model shows that monthly members do not have the habit of continuous shopping throughout the year. They are more likely to choose to join when they have specific shopping needs. This means there may be seasonal fluctuations in the number of Prime members, such as during sales days such as Prime Day and Black Friday, or during the back-to-school and Christmas shopping seasons, when monthly membership growth is particularly significant. Therefore, order volumes during peak sales periods are typically much higher than during normal promotional periods.

Through an in-depth analysis of Amazon Prime members, we can see the significant role of this system in increasing consumers’ purchase intention and sales.