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10 million new Prime members for Amazon this season

Prime has been a huge revenue generator for Amazon in recent years

Financial trends and news by Steven Loeb
December 27, 2014
Short URL: http://vator.tv/n/3b13

This holiday season was a pretty successful one for retailers, with sales on the major shopping days, including Thanksgiving, Black Friday and Christmas Day, all increasing. Perhaps no company had a more successful season than Amazon, though. 

The e-commerce giant has revealed some pretty impressive numbers for the last couple of months, including the fact that it added more than 10 million new members to Amazon Prime. In all, the company said it shipped to 185 countries. 

The company saw huge gains on mobile this year as well, with almost 60% of its customers shopping while using a mobile device. In all, total holiday sales from the Amazon smartphone app doubled in the U.S. this year. Amazon also revealed that its biggest shopping day was, of course, Cyber Monday, which also happened to be the first single $2 billion sales day in U.S. history. 

As for what people were buying this year, Amazon listed many of its own items as top sellers, including the Amazon Fire TV as the best-selling streaming media box, and the  Fire HD 7, Fire HD 6 and Fire HDX 7 as the best selling tablets.

Top books included Laugh-Out-Loud Jokes for Kids by Rob Elliott; Diary of a Wimpy Kid: The Long Haul by Jeff Kinney; Killing Patton: The Strange Death of World War II’s Most Audacious General by Bill O’Reilly, while top video games sold on the site included Call of Duty: Advanced Warfare; Just Dance 2015; and Super Smash Bros.

Amazon, as always, gave some pretty humorous stats as well, including the fact that customers purchased enough laser pointer pet toys to give more than seven to every Lasik eye surgeon in the US and that they purchased enough Rubbermaid storage containers to pack a lunch for the entire population of Montana. 

The most important stat of all, though, is that huge increase in Prime members. That number is a very big deal for Amazon, as Prime has been the company's golden goose.

Earlier this year, a report by Morningstar analyst R.J. Hottovy estimated that Amazon had 10 million Prime subscribers by the end of 2012, up from four million at the end of 2011. The Kindle Fire played a big role in that growth, as subscriptions exploded after Amazon began offering the free 30-day trial with each Kindle Fire purchase. And while Prime subscribers only represent about 4% of Amazon’s 182 million active users, they represent 10% of all purchases. Prime subscribers also spend more than non-subscribers: $1,200 versus $500, respectively.

Amazon prime cost $79 annually at the time (it has since been bumped up to $99) of which Amazon pocketed $78. It broke even on shipping and all of the other things it offered Prime subscribers, but that $78 per subscriber worked out to make up one-third of Amazon’s consolidated segment operating income in 2012, according to the report.

(Image source: aquaristequipment.com)