Why Amazon Prime Is The Key To Amazon Business Model Long-Term Success

Amazon Prime is a key driver of long-term success for Amazon, as it enables it to keep its customers in the long-run. Indeed, as Amazon Prime enables fast delivery and free delivery, it allows the company to keep customers in the long-run, which otherwise would go back or revert to more traditional brick and mortar retailers like Walmart.

When we look at Amazon Prime; which is a membership program that includes unlimited free shipping on over 100 million items; access to unlimited streaming of thousands of movies, and TV episodes, and other benefits.

amazon-prime-video-revenue-model-explained

There are several reasons why AmazonPrime is a key driver of the long-term success for Amazon:

  • Higher spending from Amazon Prime members.
  • Increased repeat customer base.
  • Customers retention.
  • Long-term sustainability of the customer base. Indeed, in the long-run, a repeat customer of Amazon might churn given the continuous costs of delivery.

Why Amazon customers’ base might be so dependent on Amazon Prime

Reducing the options to revert to traditional brick and mortar retails by removing the cost of delivery, which does not exist on the brick and mortar provider. And providing fast delivery, which makes it a no brainer for the Amazon customer to spend on the platform, as the items can be delivered quickly.

In short, the Amazon customer might be more willing to refrain its need to buy now on the brick and mortar store, knowing that Amazon will deliver it quickly at a lower price.

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