On Tuesday Amazon Inc. announced that it plans to offer United States residents who receive government assistance a 45 percent discount on its Prime membership. Essentially, lower income individuals will pay only $5.99 per month instead of $10.99 per month.
Amazon Inc. is Widening Its Reach
All of this is part of Amazon’s plan to widen its customer base. Last year the company opened up to the monthly payment option, making the services available to many more people. Prior to allowing monthly payments, Amazon Prime memberships were charged on an annual basis ($99 per year).
Company executives realized they still weren’t reaching everyone though. Lower income individuals and families were still shopping elsewhere and going elsewhere for their entertainment needs. The announcement made it so that any Amazon shoppers with an EBT (Electronic Benefits Transfer) card or receiving WIC (Women, Infants and Children Nutrition Program) benefits will be able to receive the lower Amazon Prime rate.
Amazon Offering EBT and WIC Payments
When Amazon first launched the monthly option it was seen as a way to attract customers with an annual salary under $50,000 who may have not been able to pay $99 at once for the year. This latest announcement was seen as a way to gun for traditional retailers and grocers. Amazon hasn’t been able to attract lower income customers but with the new policy the company is likely to attract many more.
Amazon Inc. will also begin to accept WIC and EBT payments for food items sold through the site this summer. Amazon grocery services do require an additional fee on top of the Prime membership. It is not yet clear as to whether the new, lower income customers will receive a discount on the company’s grocery services as well.
Amazon Prime Services
On top of having a discount and being able to pay with WIC or EBT, lower income customers will also be able to take advantage of Prime’s regular services. Amazon Prime services include free shipping on many orders, Amazon Video and Amazon Music as well as some Kindle eBooks for free or at a discounted price.
Customers are likely to see even more services become available in the years to come. Amazon Inc. CEO Jeff Bezos said that he plans to add so many perks to Amazon Prime that it would feel irresponsible not to pay for it because you’d be saving so much money doing so.
Currently Amazon Inc. is already dominating most marketplaces. Millions of people were already heading there for clothing, electronics and specialty shopping. Now people are hitting Amazon for music, video streaming and even groceries. It will be interesting to see how the services expand in the years to come.
What do you think about Amazon’s new Amazon Prime promotion?
Photo: BGR
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James Hendrickson is an internet entrepreneur, blogging junky, hunter and personal finance geek. When he’s not lurking in coffee shops in Portland, Oregon, you’ll find him in the Pacific Northwest’s great outdoors. James has a masters degree in Sociology from the University of Maryland at College Park and a Bachelors degree on Sociology from Earlham College. He loves individual stocks, bonds and precious metals.
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