Here are the things that led me to cancel Amazon Prime, including reasons you should think about dropping it too. I’m not trying to single out Amazon, this is primarily a cost-benefit analysis.
Full disclosures: I’ve had various relationships with Amazon for a long time. I buy a lot of uncommon stuff that is hard to find, so I order things from Amazon frequently. In 2019 I averaged more than one order a week from them, typically containing multiple items. I also watch videos and read ebooks from Amazon Prime.
In addition, I used to be the CEO of a company that sold things online. We built and ran e-commerce sites for large media companies, including HBO, Sony, Paramount, Tribune Media, Douglas Adams, and many others. We created, inventoried, and sold merchandise, managed advertising campaigns, and shipped to customers. We also became one of the first third-party vendors for Amazon. In that early era of online e-commerce, we used data heavily to figure out what worked and what didn’t. So I have some insight into this kind of business and how they operate.
Amazon Prime
I joined Amazon Prime (AP) when it was first offered because it made sense back then. I ordered stuff often enough that I easily saved the cost of AP. When they added videos, that made it an even better deal. Ordering most things from Amazon also made sense because it saved time — I only had to look in one place because their prices were good.
Of course, over time little cracks appeared in this logic. The first thing I noticed was that as Amazon became more popular their prices started to rise. Even though I would often first look on Amazon for a product, I started looking in other places too, to make sure. So I was no longer looking in only one place. What really surprised me was that often I could find common things in a local (brick and mortar) store for less money than on Amazon.
Even so, that didn’t stop me from shopping on Amazon because it was easier and still saved time, especially for the unusual things.
In addition, the world started to change. I found that as streaming services proliferated there were fewer and fewer videos to watch on Amazon Prime. Libraries started offering ebooks for free. I found I didn’t use those extra benefits anymore. So the cost-benefit analysis became mostly about shipping costs and convenience.
Unfortunately, Amazon started to nickel and dime (you know, like what airlines do). First, the cost of AP kept rising. Even worse, Amazon kept finding ways to make it less of a benefit. For example, for some time they stopped giving free shipping at all for inexpensive things, typically those that cost around $5 or less. You either had to pay for shipping (even though I was already paying increasing amounts of money for AP to get “free” shipping) or you had to wait and order those small items at the same time you ordered more expensive items, so they could be shipped together. That was a huge crack in both primary advantages of AP — cost and convenience.
This often happens when companies grow so large and successful that they become more interested in making as much money as possible, rather than taking care of their customers. Not just airlines, but also US car companies, which is what allowed foreign (mostly Asian and European) car companies to become dominant (even my favorite US car brand, Chrysler/Plymouth/Dodge/Jeep, is now owned by Fiat).
Delivery Problems
Next, even though AP promised two-day shipping, they started to break that promise. Some items arrived days, or even a week or more late, for no particular reason. Note that this started happening months before the coronavirus caused disruptions and delays. But the pandemic definitely made it more common. In fact, nothing I’ve ordered in the last month or so has actually arrived when Amazon said it would, even when they said it would arrive in 3 weeks rather than the 2 days AP promised.
Even worse, some things never arrived. Here are some examples:
I ordered four items of clothing. When the box arrived, there was only one of them in the box. The other three were missing. Someone forgot to put them in the box, or perhaps stole them. That’s when I noticed that there was no way to contact Amazon customer service. There was an automated way to do a return, but you can’t return something you never received! Amazon had no option covering not receiving a package, even though I knew that shipping mistakes and lost packages are not particularly uncommon (from my experience running an e-commerce company).
Amazon’s only contact point for customer service is their chat system. But their chat system is a robot, not a real person. I tried every way I could to explain what had happened, but the chat robot never understood. I tried asking to speak to a real person, but it ignored me. I spent hours trying to get the chat system to help but to no avail. It would just give me answers that had nothing to do with my problem.
Another order only had two things in it. They were supposed to arrive the same day, in separate packages. On the scheduled day, one package arrived just fine. The other package was not delivered. When I tried to track it, Amazon said that they were unable to deliver the package because there was something stopping them from accessing my front door. There was someone home the whole time. Plus they were able to deliver the other package the same day.
The Amazon tracking page said that they would try to deliver the package again. Weeks went by. Amazon continued to claim they would deliver it right away. Again, no way to contact Amazon, and no way to fix the problem with their hopeless automated chat system.
Another order was for a single item from a third-party vendor on Amazon. Watching the Amazon tracker, it said it was being shipped via the USPS. Soon, it showed that it was in transit and eventually said the package would be delivered that day. But when I went to the USPS website with the tracking number, I discovered two things:
- It was not actually shipped by USPS. Amazon shipped it themselves, and they were responsible for all the shipping other than the actual delivery. Instead, they would hand it off to a post office near me, and the USPS would deliver it.
- The item had not actually shipped yet. It was still in the Amazon warehouse. The tracking information from Amazon was a lie. Lucky for me, I knew how to get to the actual tracking information.
So while Amazon’s tracking info made it look like the shipping problem was caused by the Post Office, it was really their problem.
Not surprisingly, the item never arrived that day. That night, the Amazon tracking info suddenly changed to saying that the item had not shipped yet.
I tried Amazon’s infernal chatbot one last time, and something completely different happened. It immediately asked me if I was asking about that particular order, and then offered to let me talk to a real person, which I did. And they were able to fix some of my issues! It was like night and day.
I’m guessing (but pretty sure) that the reason I was able to talk to a real person was because that package was from a third-party vendor, and the Amazon chatbot had a completely different script for them. Ironically, the only problem they were not able to fix was the package from the third-party vendor.
I’ve had plenty of other examples since then (including more packages where the Amazon tracking page contained incorrect information). Thinking about it I realized that I was spending more time tracking down orders than the time I had saved by buying them from a single vendor. When I talked to friends about this, many had similar experiences, but they chalked it up to the pandemic disrupting shipping. But that doesn’t explain why Amazon’s tracking information was often wrong.
Even more telling, I had ordered several items from vendors other than Amazon, including Costco, eBay, and Monoprice. During the same time when every order from Amazon was delivered late (or not at all), I never had any problems with any other vendor. And none of them gave me bad tracking info. I received their packages when they said I would.
Lock In
I was paying $119 a year for AP shipping that was far worse than (often free) shipping from these other vendors. The worst part of this is that once you pay all that money for “free shipping” it tends to lock you in to using that vendor, because you’ve already paid for it. And once you are locked into Amazon, they have less and less incentive to actually do a good job for you. The bigger they get, the less you mean to them as a customer.
But AP had a much more insidious effect. Paying for AP also meant that I was doing less shopping at local businesses. This despite that I had found that local businesses were often able to compete on price with companies like Amazon.
The question for me became, how much are people willing to pay to live in a nice, vibrant city? Most people are willing to pay a lot more to live in a really great city. And there is strong evidence that communities with thriving local businesses have lower rates of crime and poverty, and higher rates of giving, volunteering, and voting. But the pandemic and its shutdowns and economic damage are threatening to kill many (if not most) local businesses.
Who wants to live in a place where most of the local retail businesses are boarded up? It makes good financial sense to buy at local businesses to keep them alive. And as mentioned, in many cases you won’t have to pay more, and you also have the opportunity to build a beneficial relationship with a small business owner.
For example, where I live, a local small business owner solved the problem of not being allowed to have customers in her store by setting it up so that people could contact her over FaceTime. She then walks people around the store virtually (in better times, she would have been doing that in person anyway). Then when you are done shopping, she will either ship the items to you or you can drive by and pick them up at the curb.
So I decided to find ways to do more local shopping, and even if I need something I cannot find locally, I will only use Amazon (or similar companies) as a last resort. By canceling AP, I will not be locked into a single vendor anymore. After all, the time spent buying from local shops probably won’t take more time than I’ve been spending fighting Amazon’s shipping problems, and it will be so much more enjoyable to interact with actual owners of small businesses in my local community.
Bottom Line
- AP tends to lock you into buying from one vendor, and that creates a monopoly, which invariably reduces your choices and raises prices.
- AP may have once been a good deal. Make sure it is still working for you. Amazon has already shown that it will charge more and provide fewer benefits over time.
- Buy locally. If your local businesses die, you will become more dependent on large, impersonal monopolies, and your hometown will suffer. Because of the coronavirus, many local shops now have ways that you can shop online or by phone, and it will be easier for you to get to talk to a real person.
Give it a try!