Newegg has come up with a solution to the likely scenario of Amazon increasing subscription fees of its Prime membership program. Premier, as the Newegg service is termed, will require members to pay an annual fee of $50, which will qualify them for free 3-day shipping. Other freebies include dedicated customer service, free returns, and no restocking fees. However, what prospective members will miss out on is the instant video streaming service that Amazon Prime members get to enjoy for $30 more at the present rate structure, along with Kindle book borrows.
Other benefits that members of the Premier program include discounted rates for expedited shipping, custom backgrounds with information panel, and early intimation of upcoming sales along with exclusive deals for the members of the Premier program. In any case, the Newegg offer does make a lot of sense to those who can do without the video streaming service or have Netflix.
True, Amazon betters the Newegg offer by offering 2-day deliveries to its Prime members on everything it sells (not just electronics) though Amazon also has other areas that are critical to its business needs. Selling content to feed users of its Kindle range of tablets and ereaders is just as important a part of its overall business objective as its retailing arm. As such, Amazon needs to have a subscription service such as its Prime. Newegg, the second largest online retailer in the US (behind only Amazon) has none of that and can concentrate entirely on its e-tailing business.
What seems most likely is that either Amazon withholds increasing its Prime membership fees, or introduces a two tier approach, a high end service including all the perks that current Prime members get and a slightly discounted service at the base sans video streaming.