Repricing Amazon Prime: Goals, Member Segments, Packaging Options and Rollout

You are a product manager at Amazon and have been asked to change how the Prime membership is priced. How would you approach the decision, and what would you recommend? ```hint Price the whole relationship Prime is a bundle of benefits, and members tend to shop with Amazon more often. Before choosing a price, think about what a member is worth to Amazon beyond the fee itself, and which members value which parts of the bundle. ``` ### Clarifying Questions - What should the change achieve: more profit per member, more members, or covering the rising cost of fast delivery and video content? - Is the direction open (raise, lower or restructure), or has a price increase already been decided? - Which market is this for: the US, or a more price-sensitive market where the price point and competition differ? - Is restructuring in scope, such as tiers, separating Prime Video, or changing the balance between monthly and annual plans, or only the price level? ### What a Strong Answer Covers - A clear goal for the change, and an understanding of Prime as a loyalty engine whose value includes the extra shopping members do, not only fee revenue - Member segments by the benefits they use and how sensitive they are to price, with attention to the groups most likely to leave - Several pricing options compared on revenue, churn, complexity and trust, ending in a recommendation - Quantified reasoning about how much membership loss the change can absorb, and how willingness to pay would be estimated before launch - A rollout and communication plan, with metrics and guardrails for membership, shopping behavior and customer trust ### Follow-up Questions - In a test market, membership holds steady after your change, but orders per member slip slightly. Do you ship it? - How would you measure price sensitivity when showing different members different prices for the same membership could cause a backlash? - Would you separate Prime Video from the shipping benefits? What happens to members who mostly joined for shipping?