Amazon’s Prime loyalty program was initially met with doubts about its feasibility. In 2018, CEO Jeff Bezos reflected on the service’s humble beginnings, when a junior software engineer proposed an “all-you-can-eat buffet” of fast, free shipping. However, the finance team’s calculations were grim.
The initial concept was unsustainable due to high shipping costs and the prospect that heavy users would consume most of the service’s resources, making it unprofitable. Despite this, Bezos took a risk and saw potential in the idea.
The program launched in 2005 for $79 per year, offering unlimited two-day shipping. It revolutionized consumer expectations and helped Amazon dominate the e-commerce market. Prime members spend more and shop more frequently than non-members, contributing to Amazon’s $2 trillion valuation.
Today, Prime serves over 20 countries, with a global membership exceeding 200 million. The program’s success has been marked by significant growth, including a 10% year-over-year increase in fourth-quarter net sales of $187.8 billion.
Source: https://www.benzinga.com/25/03/44132215/jeff-bezos-once-spoke-about-amazon-primes-risky-beginnings-and-why-free-shipping-seemed-like-a-terrible-idea-at-first