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Amazon Prime May Have 50 Million Members, Analyst Says

That's big.

Asa Mathat
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

If you know anything about Amazon’s PR tactics, you know the company almost never discloses sales numbers for specific products. So when the company strayed from its norm a bit late last year by saying that “tens of millions” of people were members of Prime, its paid subscription service for two-day shipping, analysts latched onto it.

Respected analyst Mark Mahaney of RBC Capital ended up concluding that Prime has somewhere between 10 million and 20 million members in the U.S. and perhaps 20 million to 30 million worldwide. But in a research note today, Mahaney said RBC is now boosting that estimate to between 30 million and 40 million in the U.S. and 40 million to 50 million globally.

Why the change? A survey of more than 4,000 Amazon customers conducted by RBC Capital this month found that 37 percent were current Prime members. And RBC says that percentage leads to its new estimates.

If accurate, this matters for a few reasons. Amazon Prime members spend significantly more on Amazon each year — 2.3 times more, RBC says — than customers who aren’t part of the Prime program.

It also would mean Amazon’s Prime price hike from $79 to $99 earlier this year would be an even bigger windfall. That means by 2016, the $20 price bump could generate incremental revenue of as much as $1.7 billion and incremental earnings per share, excluding some items, of as much as $2.41, the note says. That’s big.

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