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Amazon Prime membership driving revenue growth, analyst expectations

Prime is now becoming a prime source of revenue for the top e-tailer.

September 16, 2015

Amazon’s prime membership program, Prime, is paying off for the top e-commerce player.

In fact the revenue expectations from the program is prompting one industry analyst to bump up his estimate of share price.

RBC Capital Markets boosted its price from $650 to $705, a nice jump given Amazon was trading in the low $500 range just late last week, according to a CNBCreport.

The main driver for optimism is the increasing numbers of Prime members and related member engagement.

The analyst firm states Prime embracement has nearly doubled in the past two years, from 25 percent growth in 2013 to 40 percent this year, and estimates there are now 50 million Prime members in the U.S., and somewhere between 60 and 80 million worldwide.

The more subscribers, the more revenue sales, states RBC which estimates new Prime members spend nearly $800 in their first subscription year at Amazon.