What Does Prime Membership Sharing Mean to Amazon?

As everyone here should know by now, Amazon recently announced the end of a small, obsolete program that allowed Prime Members to share their shipping benefits with friends and family. Our original and updated post from last week explained this program; how Amazon ended it; and some confusion about how Amazon communicated all of this. Only a few hundred thousand Amazon customers were affected by the change, but the public reaction brought Amazon Prime membership sharing to the fore.

There are very legitimate and even encouraged ways to share an Amazon Prime membership. Notably, Amazon Family allows two adults and up to four children, presumably all of whom live together at the same physical address, to share Amazon Prime benefits while using separate Amazon accounts. Others may share an Amazon login, with all of the complications of a single payment wallet, shopping cart, and order history.

We theorized that paying Amazon Prime members and those that use a shared account are likely different types of Amazon shoppers. As it turns out, paying for a Prime membership makes someone a much better customer than using someone else’s membership. The paying members spend about two times as much.

Based on how they reported they joined Amazon Prime, we divided US Amazon shoppers using a Prime membership into two groups, or really three. Those that said they signed up for Amazon Prime using a 30-day free trial were deemed very likely to pay for their membership. Those that said they joined Amazon Prime when a family member shared it with them were deemed likely to not pay for their membership. And those with other, less certain responses were excluded from this analysis. Those that likely pay for their own Amazon Prime membership spend almost $1,200 per year, compared to about $550 per year for people that likely use someone else’s paid membership (Chart 1).