Amazon launched in Australia off the back of a cheap Amazon Prime service, now there is speculation that the price of the Amazon offering could rise significantly.

In the USA Amazon has jacked up the price of their annual Prime service which is wrapped around cheap shipping and additional discounts to A$194 a year, previously it was A$166 a year.

In Australia, an Amazon Prime subscription is currently $6.99 a month or $59 a year.

Amazon claims that the steep price rise price is meant to address higher costs Amazon is facing across the board, from shipping to labour to construction, according to analysts.

The price change will go into effect for new members on February 18th and for current members after March 25th.

The price for a monthly membership to Prime in the USA is also going up A$21 a month.

Higher costs across led Amazon’s operating income to dip substantially during the final quarter of 2021, falling to $3.5 billion from $6.9 billion a year earlier, the company announced in an earnings release overnight.

It’s the second quarter in a row that Amazon’s profit has dipped.

Amazon last raised the price of Prime in April 2018, citing higher costs around shipping and other perks. Prior to that, the price was raised to $99 per year in 2014, after having remained at $79 annually for nearly a decade since its launch in 2005.

Prime passed 200 million subscribers last year. Amazon has continued to expand the service’s offering, growing from quick shipping speeds to also include access to Prime Video, music streaming, Twitch perks, and more.

Amazon CEO Andy Jassy said some cost hikes the company is facing are “short-term challenges” but will continue in the coming months. Amazon “saw higher costs driven by labour supply shortages and inflationary pressures” during the holidays, Jassy said, “and these issues persisted into the first quarter due to Omicron.”