Amazon to raise fees as revenue disappoints

Feb 01 2014, 19:57 IST
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SummaryAmazon investors might have finally heard the news they have been waiting for: The retailer is raising shipping fees.

Amazon investors might have finally heard the news they have been waiting for: The retailer is raising shipping fees.

“This is the first time we’ve ever seen Amazon flex its muscles in terms of pricing,” said Gene Munster, an analyst with Piper Jaffray. “It’s hugely significant.”

The news came in a conference call when the Seattle-based retailer discussed its fourth-quarter earnings.

The announcement helped deflect disappointment that Amazon’s torrid growth might be slowing. Revenue was $25.59 billion, up 20% from the quarter in 2012. Earnings per share were 51 cents, up from 21 cents.

Thomas Szkutak, Amazon’s chief financial officer, said the price increase for Prime, if it happens, would be $20 to $40.

“Shipping costs have gone up a lot, fuel costs have gone up a lot,” he said.

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