Amazon tests a $9.99/month grocery subscription service for Prime members, offering unlimited Whole Foods and Amazon Fresh grocery delivery on orders over $35
Annie Palmer / CNBC :
Context & Ripple Effects
Amazon’s grocery-delivery pricing has repeatedly shifted between bundled Prime benefits and standalone charges: it removed the monthly Amazon Fresh fee for Prime members in 2019, then introduced variable delivery fees on smaller Fresh orders in 2023. This test again separates delivery access into a paid layer while retaining a $35 order threshold.
The move follows Amazon’s recent expansion of online grocery delivery beyond Prime members, making the Prime offer a clearer attempt to differentiate membership access across Amazon Fresh and Whole Foods.
First-order effects
- Eligible Prime members in the test can replace per-order delivery charges with a $9.99 monthly fee for unlimited qualifying deliveries from Amazon Fresh and Whole Foods.
- Amazon gains a recurring revenue option for grocery delivery while preserving the $35 minimum order value.
Second-order effects
- The subscription gives frequent customers a predictable delivery cost, while infrequent customers may remain on per-order pricing or choose other grocery channels.
- Combining Fresh and Whole Foods in one plan makes Amazon’s grocery brands more tightly linked at checkout, increasing the importance of delivery economics across both services.
Third-order effects
- If expanded, grocery delivery could become a more explicitly tiered Prime benefit: broad access for members, with recurring delivery fees used to fund higher-frequency use.
- The pattern points to online grocers treating delivery less as a universal loyalty perk and more as a separately monetized service whose value depends on order frequency.
The trend: Amazon is iterating toward subscription-based grocery delivery that balances Prime differentiation with the cost of fulfillment.