My one year experiment with Amazon Prime.

It’s been just over a year since we started our Amazon Prime experiment.  For those of you not  familiar with Amazon Prime, it’s basically a program that provides free 2-day shipping on most Amazon orders as well as unlimited streaming of videos via Amazon Instant video.

Unlike a free Amazon membership, Amazon Prime speeds up shipping to two day free delivery on any size order. As part of the deal, you also receive access to the Kindle lending library, This allows you to borrow one e-book per month from the Kindle owners lending library.  It all sounds great, but there’s a $79 annual fee.  I hate annual fees, but in this case, I was replacing one with another, so I decided to replace our Costco membership with Amazon Prime.

Burned out on Costco

The idea to join came to me after visiting our local Costco and realizing that between the time it takes me to park, navigate the store, deal with oversize packages and the always ridiculous lines, any savings we had was definitely negated.

Add this to the fact that my wonderful wife SuperK was also visiting once a month or so and would often come back with all kinds of unintended purchases, including one of my favorites, a 3 gallon jar of olives. To top that off, both of my kids had nicknamed Costco “the rat store” as occasionally they would get a glimpse of a jumbo sized mouse. This really added to the zoo like atmosphere of the store. To be fair to Costco, I believe it’s nearly impossible to have a warehouse this size, full of food, that is completely free of varmints. Comes with the territory.

So that was it. I decided to replace our $55 Costco membership with the $79 Amazon Prime membership.  After the first year I can say it’s going swimmingly.

 Here are the highlights :

• I started to see immediate benefits, ordering business books and office supplies at a lower price, more than justified covering the prime membership as a business expense.

• I found that by ordering online, it was much easier to quickly compare prices by pasting the item name into Google shopper and then picking the Amazon item with the best cost per unit. It makes sense to do a quick comparison as Amazon gives you the option of multiple vendors and package sizes. They also include unit pricing.

• The unit pricing is usually great. For instance we pay a dollar a roll for decent quality  non-generic paper towels.  In Google shopper I can quickly find out if this is a better price then I would get via Walmart and other discount stores, and it usually is.

• All of my purchases are saved, and easily accessed, in my purchase history so that I can  quickly reorder items with one click.  This is great for me versus wandering aimlessly around a Costco store or Target. SuperK will verify that shopping gives me hives.

• Think about this, I can bang out a 2 ½ hour shopping trip in about 20 minutes completely skip the line and have all of this including 25 pound bags of dog food and cat litter show up on our doorstep.

• For items you order once a month, like dog food, you can get an additional 5% discount for creating a monthly order. If you have five or more monthly items you can save 20%. The monthly recurring subscriptions are a bit tricky as it’s actually hard for us to find 5 items we need every month on the same delivery date.

• The streaming HD video is awesome. The Frug hates expensive cable add-ons, so by combining unlimited streaming of the Amazon 41,000 video library with my basic Netflix package, I am one step closer to movie Nirvana, sans cable company. Also tons of great TV like Mad Men, Workaholics, and Covert Affairs streaming on-demand, any device. You can use a Roku HD to consolidate access to both. More on this later.

• They ship almost anything 2-day including 25 pound bags of cat litter or dog food. Super K used to drive over 30 minutes round-trip to pick up this kind of stuff. Now we save our backs, some gas, and have it delivered to our front door.

• You can still purchase Kirkland brand items like vitamins, trash bags etc. via Amazon Prime.

• Amazon has a great app. I can just scan that bag of cat litter when I need more and dump it right in my online shopping cart.  It’s like your own personal checkout lane in the cloud.

Conclusion

I would have to say the biggest benefit of Amazon Prime is cost savings. Based on my calculations, we’ve saved over $900 this past year using Amazon Prime. The other BIG benefit is the time savings, and the near elimination of any impulse purchases or waste from accidental “oversized jar of olives” type purchases.
Speaking of olives, one drawback of Amazon Prime is it may be less useful for folks who do their grocery shopping at Costco. Amazon has a fantastic selection of household items but obviously food is limited and more expensive.

One additional word of advice on Amazon, you need to check prices on bulk items to be competitive with Costco. Costco does not have as large as a selection as Amazon but generally the bulk items they have are less expensive. You can counter this by doing a quick check on bulk items using Google shopper or the Red Laser app.  After you get the swing of it you will end up ahead based on the time saved alone.