RAFI MOHAMMED, HARVARD BUSINESS REVIEW:
"The brilliance of Prime is in how the bundle of benefits is constructed. At its inception, Prime’s key benefit was unlimited two-day shipping. This promotional program was targeted at 'Whale Buyers,' those who purchase a lot. For Whales, the calculation is straightforward: 'Am I going to make enough purchases – and thus save on shipping costs – to justify the cost of Prime?' If the answer is 'yes,' this cost savings justification makes Amazon top of mind for all purchases, including small items such as tweezers normally bought at CVS. And if Amazon loses money on shipping (i.e., cumulative shipping costs are greater than the $99 Prime price) for a particular member, the loss can be rationalized as a volume discount to a big-spending customer."
This is an interesting analysis with several good points. Read the entire piece, here.
For quite some time now, I've been contemplating signing up with Amazon's Prime. But, I haven't quite gotten around to it, despite the fact that I buy stuff from Amazon.com relatively often, that I can see myself definitely using all the other perks built into it, and, my two sisters are already happily signed up to this service. This "Prime Day" promotional event is probably the last straw that will break my back into finally signing up with Amazon's Prime.