5 Reasons Why Amazon Prime Is a Terrible Buy

Updated November 12, 2020 by Kyle
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A couple days ago I saw that Amazon.com is considering bumping up the price of their Prime Membership by $20 or $40 bucks. It is currently $99 annually, so it will potentially be $109 or $119 per year. This story got me thinking about the Prime Membership, which for those of you that don’t know, gives members unlimited free 2-day shipping, some free Kindle books every month, and access to Amazon instant streaming (think Netflix after it got shot, run over, then run over again). Is it worth the money every year? Does it make you overspend? Does it make you a lazy shopper? To those 3 questions I say No, Yes, Yes. Keep on reading to see why…

1. Amazon Already Has Free Shipping on $25+

I mean sure, the free 2-day shipping all orders is a great incentive, but are you aware that Amazon already offers free shipping on $25+ orders? For those who say, “But most of my purchases are under $25 and won’t qualify for free shipping.” To them I say make sure and combine orders until you reach the $25 threshold.

Have a little will-power on purchases and wait until you have several items you need to buy before you make an order.

The idea that you must have something in 2-days means you should probably be heading to your local Walmart, Target, or grocery store to buy it.

If you are a shopper that buys stuff online and always “Needs It NOW” and you’ll happily pay for expedited shipping to make it happen, then the Prime membership will definitely save you money, but I think this is a pretty small percentage of the population.

See Also: 6 Brilliantly Slick Ways to Get Amazon Prime for FREE

2. Prime Membership Makes You a Lazy Shopper

This may be the single biggest reason why the Amazon Prime membership is a bad buy.

Put simply, it makes many consumers flat out lazy. They don’t compare pricing anymore, they don’t haggle for a better price, they don’t take advantage of retailer’s price match policies, and they sure as heck don’t seek out coupons in order to get the best deal possible.

Instead they head straight to Amazon.com and click a single ‘Buy It Now’ button and viola!, it magically appears on their doorstep two days later.

Many shoppers at this point will make the argument that Amazon always has low prices so I don’t need to be a smart consumer. WRONG! Check out my article Price Smackdown: Walmart.com Vs. Amazon.com which clearly debunks this myth.

3. Amazon.com is a “Walmart-Wolf” in Sheep’s Clothing

When it comes to branding, Jeff Bezos and the marketing team at Amazon are absolute geniuses.

Over the years they have kept the brand “cool” in the eyes of consumers while the Walmarts of the world are seen as a company who ruins the little guy, pinches suppliers to death, and offers low paying jobs and sub-par health benefits.

One of the ways Amazon pulls this off is by not having a human face on the business. There is not some minimum-wage earning oldster greeting you when you shop at Amazon.com and there is very little written about the Amazon warehouse employees.

Employees toiling in the gigantic Amazon warehouses have very little voice and Amazon likes it that way. See True Stories of Life as an Amazon Worker from Gawker to get a glimpse behind the Amazon curtain.

So why do I bring this up? I don’t want you to just accept Amazon and the Prime membership as a alternative to the Walmart culture and way of doing business. In the end, there is not a huge difference between the two.

4. Ridiculously Easy to Overspend

I’m going to get a little psychological with you for a minute. I believe that many Amazon Prime members feel they need to shop with them as much as possible in order to recoup the membership fee.

I have talked with enough loyal Amazon shoppers over the years to confirm this phenomena.

So what is the outcome? People buying everything under the sun from Amazon, often paying much more than they would at their local store, in order to get the free 2-day shipping. Overspending up the wazoo.

I would also make the argument that the biggest reason for Amazon potentially raising the cost of the Prime membership is because they know people will end up buying more from them in an effort to make sure they “get their money’s worth”.

5. Prime Streaming is a Joke

If you’ve ever tried the Amazon Instant Streaming feature you already know what I am talking about. The selection is weaker than Michelob Ultra Light and it’s clearly an add-on designed to entice you into buying a movie or TV show because you’d rather shoot yourself than watch one of the free ones.

If you already have cable or satellite TV the Prime Instant Streaming will probably never be used. But if you don’t, you could definitely find something to watch for free. Just don’t expect anything made in the past several years.

BONUS: Prime Membership Savings Tips:

If you’re on the fence about dropping the cash on an Amazon.com Prime membership, I have a few tips to minimize your costs.

1. Free 30 day trial. Amazon offers prospective members a free 30-day trial. I typically recommend shoppers to sign-up for their trial just before Black Friday so they can do all their Christmas shopping and get free 2-day delivery.

But since we are in mid February that doesn’t make a lot sense. Once you start your free trial, track your purchases and your savings in terms of shipping costs.

Add them up at the end of the month and times it by 12 to get a rough idea of your annual savings.

2. Invite family/friends and save. Not many shoppers know that you can invite four family members or friends into your Prime membership with you.

So theoretically you could split the costs and only pay $15.80 per year making it a total no-brainer.

It is also worth noting that only the primary member gets access to the free streaming service.

3. Get Amazon price alerts. If you end up (or already are) a Prime member you need to be using CamelCamelCamel.com as it allows you to create Amazon price alerts on products you want to purchase.

The website then emails you when the price drops below a predetermined price point. It’s a sweet little free tool with a totally stupid name.

Ask the Reader: Are you an Amazon Prime member? If so, do you think it is worth the current $99/yr price tag? What about if they raise the annual fee to $119? Also, do you think it makes you overspend and not research the best price?


By Kyle James

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Kim

I agree and disagree. I am so sick of the service at our local WalMart that I am on a self imposed one year boycott. Our town is so small that we have Walmart, Safeway, and City Market, which is a Kroger affiliate. I already only want to WalMart for stuff that was outrageously high or unavailable at the grocery store. So far, Amazon has been outstanding and the prices are either right at or below what I’d pay at Walmart or the grocery store. I can see how it would be tempting to buy everything, and you just have to remind yourself to buy what you need. I also like the streaming service. They have House Hunters and Discovery Channel shows we thought we’d given up when we cut satellite TV. I think like with any purchase, you need to compare and not jump on the bandwagon. In my case, even if Amazon is awful to employees, I don’t have to deal with them being rude to me.

C. the Romanian

I am glad I went with the 30 day trial. All I wanted was to watch House Hunters International because I’m a little addict. It appears though that I am not allowed to, even if I pay for it, here in Romania, so I decided to dump it the next hour. One more reason for me to consider it a terrible buy πŸ™‚

Char

Thx. It really won’t help me. Thanks for your input. I though u automatically got things on Amazon at a cheaper price!

DC @ Young Adult Money

Interesting take on Prime. I signed up about a month or so ago and I like the 2 day shipping. In the past we used to just wait until we had $25 or more of stuff to order before ordering, but with the $35 minimum it’s been difficult to get to that level without adding things we don’t really need.

lyle @ the Joy of Simple

Hey Kyle and thanks for an insightful look into Amazon prime. I would never use such a service myself and your post makes it doubly so!!

I followed your link to the Gawker article and wasn’t all that surprised by all that I read. I can imagine Amazon are just like any other massive box store that has a bottom line to consider regardless of how they are set up.

Somehow though, I don’t think this will stop folks from shopping there any time soon!

Thanks again for a great post and take care.

Lyle

Hi Kyle! I just popped over here from Lyle’s Joy of Simple to read this article and appreciate the thoughts. I tried the Amazon Prime 30-Day Free trial once and gave it back when I saw that it didn’t stream nearly as many shows as I really wanted. Plus I always try to bundle my purchases as much as possible so that I get the free shipping 99% of the time anyway. I personally detest Walmart and NEVER shop there but now I’m heading over to see how you compare the too. Thanks again for your thoughts. ~Kathy

I do just about all my shopping through amazon and share the prime account with several people which has made it worthwhile.

In my experience, Amazon consistently has the best value over the Kmart and other shops nearby (although, I’m in NYC which can make a big difference).

I also find that I buy LESS now than I used to because when I shop online I only sign on to buy what I need and I’m not tempted by any fancy displays or impulse purchases at checkout (it’s easier to ignore it on the screen).

I could probably just stick to $35+ orders though. I’ll have to consult with my fellow account holders πŸ™‚

Jen @ Jen Spends

Good post–I see Prime touted as a “deal” on many blogs, and it’s just not.

I found that Prime itself hasn’t saved me a cent in the year I’ve used it, but I’ve saved a ton by shopping on Amazon, so I’m willing to spend some of that savings on the convenience of Prime. I think I do tend to look at Amazon more when I need to buy something, but I always price check no matter what. I’ve never paid more on Amazon just because I can get it more quickly–I’ll go elsewhere in a heartbeat if it’s cheaper. I think it’s one of those things that you have to be disciplined and smart about if you want to make the most of it. I know a lot of people do end up wasting money, but the convenience is such a big draw that they don’t care.

Terri

I just joined Prime and I did it because I do some shopping on Amazon, we have a Kindle, and I dropped my cable. Even though I have to pay for some of the shows I enjoy watching, I added it up and for all the shows I want to watch (if I watched them all) I would still be paying less than I would for cable. Now that it has gone up to $99.00 a year, it is still less. I am pleased and will keep it. I don’t do a ton of shopping on Amazon, but I get get points through Bing and Swagbucks, and my bank for Amazon and so the money I spend there is usually “free” money I have earned through those programs. For me, it is still a good deal for everything we get.

Chaz

Has anybody noticed products available through prime (because it doesn’t apply to everything on amazon) are often $5 higher than the non prime offerings? In other words they mark items up so you are paying for shipping anyway. Stocking stuffers become horribly inflated in price.

cheryl

Yes, I notice this everytime I buy something – that I haave to have soon, etc.

guest

“To them I say make sure and combine orders until you reach the $35 threshold. Have a little will-power on purchases and wait until you have several items you need to buy before you make an order.”
Who do you think you are telling me how to shop? Why does it have to be about “willpower” instead of convenience. It takes a matter of hours to go shopping for the simplest things. The average american makes 29.10 an hour. You’re effectively saying that people should be adding sixty dollars to everything they purchase instead of buying from a site that has reliably cheaper prices than any brick and mortar store all the time. Even at minimum wage, you’re still adding $16 every time you go out to make any significant purchase.

You mention retailers price matching policies, except that most brick and mortar stores now have a policy of not matching online prices.

Also, you say you’re going to get psychological, and then you proceed to say things that have nothing to do with actual psychology. It looks like you’re just modifying some cultural folk tale to suit your purpose. You say “I have talked with enough loyal Amazon shoppers over the years to confirm this phenomena.” but how many is enough? You would need a minimum of 30 objective instances, agreed upon by another observer as significantly different, to even begin to insinuate a correlation, let alone the fact that you’d be entirely missing a causal relationship.

I totally agree on the prime streaming though. I’ve got amazon prime and still pay for netflix.

Squidley McFeely

I used Prime more when there was no sales tax. Then I let it go when they raised the price. But they had a sale this year for around $80, so I signed up again. I find I use the Prime video constantly, making it worth it pretty much just for that. The $25 minimum order is a problem because Amazon prices don’t stay the same, going up and down. So it’s hard to have a cart waiting in which all the prices are equally on the low end of the scale as they fluctuate. Also, sometimes it’s cheaper to buy from a 3rd party than Prime. I’ve had very few issues returning items bought through Prime, when there’s a problem, almost making the fee worth it for that alone.

JJHerma

Problem is many orders deliver after 5 business if you do not have prime. Worst part is the orders are just sitting there in their warehouse!

I placed orders before without primte and they doing nothing. There is no other website large or small I’ve ordered from that simply leaves an order lying around if their customer does not pay extra for a membership fee like PRIME.

I can expect an order shipped with lower level of shipping service take longer to deliver, but that is a choice and it’s understandable.

Maybe Amazon’s shipping arrangements only allow for one type of shipment which naturally keeps Amazon costs down, but it seems they create a need for prime membership using unnecessary delays in order processing to justify the cost and if it were that case, it would be unscrupulous at best.

Calvin

Amazon actually ships products between FCs so they are not just sitting around doing nothing all that time. They may not make it close to your location, but they can get a bit closer. The thing is you never see this type of logistics since it isn’t tracked during that duration between moving it.

Eri

I do have amazon prime, but only because my aunt offered to invite me into hers. I’m not in a good financial situation so I definitely could not justify the annual $119 cost, but I’m not paying for it, so it does really help to not have to pay shipping when I want to buy a CD and I’m tight on cash for the month. But again, I don’t also have $119 hanging over my head every year.

Roberto

Some valid points here but I would say this (as a Prime Member):
1) Where I live 2 day shipping (if fulfilled by Amazon) means tomorrow almost all of the time, and many products offer Same Day for free (it is really awesome).
2) I am enticed by not having to drive to my local retailer to purchase or return, saves me two trips.
3) I always look at the comparison prices and I do pay more sometimes to get products fulfilled by Amazon as I return for free, they pick it up and I know they will not give me static. Many online retailers make me pay to return, pay a restocking fee, etc.
4) I do purchase a lot of orders under $35, its instant gratification for what I need now and I like that, why do you want to take that away from me?
5) I like the streaming, it is evolving, these things are not perfect right out of the gate, Netflix streaming was super weak at first. Amazon are improving it all the time.
Anyway, I am not slagging off on you or the article I appreciate the thought and understand it is a service that fits better for some more than others. I like the tips at the end it give the article a very objective feel.

Sleek

I also disagree. If you use amazon a lot it more than pays for itself. Amazon is often the lowest price anyway so that’s not even an issue. I can get big bulky expensive things shipped to me in 2 days. Do that a few times and it pays huge dividends. Also if you don’t need it on 2 days you can get pantry or digital credits to use later. Plus you can “share” the 2 day all year long by shipping to your friend or family member and then having them paypal you what it cost.

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