I totally agree with you but I would also imagine that Amazon loses money on Prime — packaging and shipping really add up, as anyone who has sold items on Ebay quickly discovers.

I never really realized how Amazon could make sense of Prime as you could easily abuse the system. I have abused it myself. I bought heavy stuff like TVs and Grills on Amazon and got expedited shipping where they would’ve been $100 to $200 to get them without Amazon Prime. I know that Amazon is a logistics genius but still they can’t ship things for free so I imagine they lose money on that. But I think Prime will be a limited time offer. I don’t know the numbers on it but it could be discontinued anytime now.

If they gave prime members a discount or some kind of bonus kindle content that might be an incentive to keep it. I personally never bought books with my prime membership before the kindle. I would take books out of the library. I can’t imagine the amount of kindle owners is great enough compared to the rest of their business either.

Prime membership has also caused me to shop more at amazon. I can pay a little more for something and have it shipped for free in 2 days, where if I purchase the same thing on another site (Like newegg for example) I would end up having to pay shipping and taxes. They get purchases from me now they would have not otherwise. I also buy things under $25 that I would not have before I had prime due to shipping.

You are exactly right Joshua. I don’t know how many things I have bought from Amazon with Prime that I wouldn’t have without it. I am not sure how long they will continue offering it though. Right now I am thinking it will be the end of October when Amazon makes the decision about Prime.