The Atlantic explains the marvel that is Amazon’s Prime program.
The subscription service is Amazon’s greatest—and most terrifying—invention.By Ellen Cushing
About the author: Ellen Cushing is the special-projects editor at The Atlantic.
Today is Prime Day. Imagine trying to explain that to an alien or to a time traveler from the 20th century. “Amazon turned 20 and on the eve of its birthday, the company introduced Prime Day, a global shopping event,” reads Amazon’s formal telling of the ritual’s 2015 origins. “Our only goal? Offer a volume of deals greater than Black Friday, exclusively for Prime members.” The holiday was invented by a corporation in honor of itself, to enrich itself. It has existed for six years and is observed by tens of millions people worldwide. I hope you are spending it with your loved ones.
Prime Day is a singular and strange artifact, but then again, so is Prime, Amazon’s $119-a-year membership service, which buys subscribers free one-day shipping, plus access to streaming media, discounts at the Amazon subsidiary Whole Foods, and a host of other perks. Prime is Amazon’s greatest and most terrifying invention: a product whose value proposition is to help you buy more products. With 200 million subscribers worldwide, it is the second-most-popular subscription service on Earth, poised to overtake Netflix in the not-so-distant future.
This popularity is both extremely logical and a little perplexing. When you subscribe to Prime, you’re paying to pledge your fealty to a single company’s ecosystem—something that consumers once wanted to avoid. You’re paying to have your every purchase cataloged—also something consumers aren’t wild about, at least in theory—so that Amazon can use that information to sell you, and people like you, more goods. You’re paying to become part of a system that is purpose-built to keep you paying, forever, and to keep Amazon growing, forever, like a katamari ball or an avalanche or, in Amazon’s corporate argot, a “flywheel.”
A flywheel is really just a heavy wheel. Because it’s so heavy, it’s hard to push—but once it gets spinning, all that weight helps it build momentum, and more momentum, ever faster. Low prices draw customers in, which provides Amazon with more data, more bargaining power, more market share, and more advantageous economies of scale, which then allows it to gobble up more businesses, grow its footprint, build more warehouses, increase selection, and lower prices even more—which then draws even more customers in. “We look for virtuous cycles everywhere,” Jeff Wilke, Amazon’s former CEO of consumer business, said in a 2012 company meeting. “Things that are complete, closed loop, and that as you inject energy into each piece of them, the flywheel spins faster and faster.” The idea, he said in the meeting, was originally written on a napkin by Jeff Bezos, Amazon’s CEO. “That napkin will eventually be in the Smithsonian Institution, I imagine,” he added. It should be.
When prime was introduced, in 2005, Amazon was relatively small, and still known mostly for books. As the company’s former director of ordering, Vijay Ravindran, told Recode’s Jason Del Rey in 2019, Prime “was brilliant. It made Amazon the default.” It created incentives for users to be loyal to Amazon, so they could recoup the cost of membership, then $79 for unlimited two-day shipping. It also enabled Amazon to better track the products they buy and, when video streaming was added as a perk in 2011, the shows they watch, in order to make more things that the data indicated people would want to buy and watch, and to surface the things they were most likely to buy and watch at the very top of the page. And most important, Prime habituated consumers to a degree of convenience, speed, and selection that, while unheard-of just years before, was made standard virtually overnight.
“It is genius for the current consumer culture,” Christine Whelan, a clinical professor of consumer science at the University of Wisconsin at Madison, told me. “It encourages and then meets the need for the thing, so we then continue on the hedonic treadmill: Buy the latest thing we want and then have it delivered immediately and then buy the next latest thing.”
Prime—especially in combination with the Amazon app—makes buying just about anything as easy as possible. With traditional retail, “there’s the friction of having to go to the store, there’s the friction of will the store have it, there’s the friction of carrying it,” Whelan said. “There’s the friction of having to admit to another human being that you’re buying it. And when you remove the friction, you also remove a lot of individual self-control. The more you are in the ecosystem and the easier it is to make a purchase, the easier it is to say yes to your desire rather than no.” According to Consumer Intelligence Research Partners, Prime members spend more than twice as much a year on Amazon purchases as non-Prime users, and more than 90 percent renew their subscription after the first year.
This type of loyalty is remarkable. “It used to be that being a consumer was all about choice,” says Emily West, an associate professor at the University of Massachusetts at Amherst and the author of the forthcoming book Buy Now: How Amazon Branded Convenience and Normalized Monopoly. But now, “two-thirds of people start their product searches on Amazon.” Prime discourages comparison shopping—looking around is pointless when everything you need is right here—even as Amazon’s sheer breadth of products makes shoppers feel as if they have agency.
“Consumerism has become a key way that people have misidentified freedom,” says Jake Alimahomed-Wilson, a sociology professor at California State University at Long Beach and co-editor of The Cost of Free Shipping: Amazon in the Global Economy. “But what Amazon represents is a corporate infrastructure that is increasingly directed at getting as many consumers as possible locked into a consumerist process—an Amazon consumer for life.” Amazon offers steep discounts to college students and new parents, two groups that are highly likely to change their buying behavior. It keeps adding more discounts and goodies to the Prime bundle, making subscribing ever more appealing. And, in an especially sinister move, it makes quitting Prime maddeningly difficult.
As subscription numbers grew through the 2010s, the revenue from them helped Amazon pump more money into building fulfillment centers (to get products to people even faster), acquiring new businesses (to control even more of the global economy), and adding more perks to the bundle (to encourage more people to sign up). The market share also helped Amazon negotiate lower rates with package carriers, which further bolstered its bottom line. In 2019, Amazon shaved a full day off its delivery time, making one-day shipping the default, and also making Prime an even more tantalizing proposition: Why hop in the car for anything at all when you could get it delivered tomorrow, for free?
At this point, Prime is infrastructure. It’s how America shops. That was true for more than 100 million of us before the coronavirus pandemic drove the world inside, but roughly 30 million additional people in the U.S. signed up for the service last year, meaning that the United States now has more Prime memberships than households. In 2020, Amazon’s revenue from subscriptions alone—mostly Prime—was $25.2 billion, which is a 31 percent increase from the previous year, and also about three times the revenue of the entire NBA. The flywheel, and the hedonic treadmill, is spinning faster than ever.
Thanks in large part to the revenue from Prime subscriptions and from the things subscribers buy, Amazon’s value has multiplied roughly 97 times, to $1.76 trillion, since the service was introduced. Amazon is the second-largest private employer in the United States, after Walmart, and it is responsible for roughly 40 percent of all e-commerce in the United States. (Walmart is second, with roughly 7 percent.) It controls hundreds of millions of square feet across the country and is opening more fulfillment centers all the time. It has acquired dozens of other companies, most recently the film studio MGM for $8.45 billion. Its cloud-computing operation, Amazon Web Services, is the largest of its kind and provides the plumbing for a vast swath of the internet, to a profit of $13.5 billion last year. Amazon has entered some 40 million American homes in the form of the Alexa smart speaker, and some 150 million American pockets in the form of the Amazon app; both, of course, make shopping for paper towels effortless and even fun, something you can do while chopping vegetables or watching television, further feeding the Amazon perpetual-motion machine.
It is now possible to live a full, even typical, life while consuming things only from Amazon or one of its subsidiaries: grocery shopping at Whole Foods, wearing clothes bought on Shopbop and Zappos, kicking back with The Man in the High Castle on Fire TV at night, maybe looking up the actors on IMDb as you do, before listening to an Audible book as you doze off. Amazon has been the subject of numerous antitrust inquiries, investigations, and lawsuits—most recently a lawsuit alleging that the company punishes sellers who list their products more cheaply on other sites—though none of these has yet resulted in meaningful changes to the company. The stakes are high; Amazon is now moving aggressively into online advertising, a space currently dominated by Facebook and Google, where it will likely leverage the tremendous amount of consumer data it gleans every second from its online and brick-and-mortar storefronts to sell hyper-targeted ads.
“Amazon is a beast we’ve never seen before,” Alimahomed-Wilson told me. “Amazon powers our Zoom calls. It contracts with ICE. It’s in our neighborhoods. This is a very different thing than just being a large retailer, like Walmart or the Ford Motor Company.”
Sometimes I find it useful to compare Big Tech to climate change, another force that is altering the destiny of everyone on Earth, forever. Both present themselves to us all the time in small ways—a creepy ad here, an uncommonly warm November there—but are so big, so abstract, so everywhere that they’re impossible for any one person to really understand; to do so would be like asking a fly perched on your forehead to draw a portrait of you, or a person being engulfed by a tsunami to describe the shape of the wave. Both are the result of a decades-long, very human addiction to consumption and convenience that has been made grotesque and extreme by the incentives and mechanisms of the internet, market consolidation, and economic stratification. Both have primarily been advanced by a small handful of very big companies that are invested in making their machinations unseeable to the naked eye.
Speed and convenience aren’t actually free; they never are. Free shipping isn’t free either. It just obscures the real price. Getting hand sanitizer and toilet paper and jigsaw puzzles and sex toys delivered to your door, contact-free, as a contagious disease ravaged the globe didn’t mean that no one was venturing into the life-threatening outside; it just meant you weren’t. Next-day shipping comes with tremendous costs: for labor and logistics and transportation and storage; for the people who pack your stuff into those smiling boxes and for the people who deliver them; for the planes and trucks and vans that carry them; for the warehouses that store them; for the software ensuring that everything really does get to your door on time, for air-conditioning and gas and cardboard and steel. Amazon—Prime in particular—has done a superlative job of making all those costs, all those moving parts, all those externalities invisible to the consumer.
Amazon warehouse workers spend their days picking and packing in million-square-foot warehouses where they face punishing productivity expectations, constant surveillance, high turnover, and serious injuries, for a starting wage of $15 an hour. The pandemic drove up demand for Amazon, and for labor: Last year, company profits shot up 70 percent, Bezos’s personal wealth grew by $70 billion, and 1,400 people a day joined the company’s workforce.
Amazon’s warehouses bring traffic and pollution to the neighborhoods they’re in, many of which are poor. After products leave the warehouse, they are shipped, at no small cost to the planet, to their destination. Sometimes they’re picked up by FedEx or UPS or the post office, but because of the volume of packages and the need to deliver them next-day, many are ferried by a network of subcontracted delivery drivers who are under intense pressure to deliver hundreds of packages a day and sometimes hit and kill people while doing it. (Amazon did not respond to a request for comment. In 2019, Amazon said that reports about its delivery subcontractors “do not provide an accurate representation of Amazon’s commitment to safety.” It has also held that its high injury rates are the result of fastidiousness about recording injuries.)
Prime is the financial engine keeping Amazon’s fulfillment-and-delivery machine running, and also the argument for its existence. If consumers don’t expect packages in 24 hours, there’s no reason to require workers to scan a new one every 11 seconds until their discs bulge. But those expectations—and their costs—are bigger than Prime, or even Amazon, because Amazon is so big that every sector of our economy has bent to respond to the new way of consuming that it invented. Prime isn’t just bad for Amazon’s workers—it’s bad for Target’s, and Walmart’s. It’s bad for the people behind the counter at your neighborhood hardware store and bookstore, if your neighborhood still has a hardware store and a bookstore. Amazon has accustomed shoppers to a pace and manner of buying that depends on a miracle of precision logistics even when it’s managed by one of the biggest companies on Earth. For the smaller guys, it’s downright impossible.
“Amazon is a shadow that we can always see,” Danny Caine, the owner of Raven Book Store, in Lawrence, Kansas, and the author of How to Resist Amazon and Why, told me. “Every decision we make is based upon the fact that Amazon can get these books cheaper and faster. The prevailing expectation is you can get anything online shipped for”— he scrunched his fingers into air quotes—“‘free,’ in one or two days. And there’s really only one company that can do that. They do that because they’re willing to push and exploit their workers.”
If amazon is like climate change, subscribing to Prime is like flying: a personal choice that pales in comparison with what government intervention could do. Just as abstaining from flying for moral reasons won’t stop sea-level rise, one person canceling Prime won’t do much of anything to a multinational corporation’s bottom line. “It’s statistically insignificant to Amazon. They’ll never feel it,” Caine told me. But, he said, “the small businesses in your neighborhood will absolutely feel the addition of a new customer. Individual choices do make a big difference to them.”
And in the case of Prime, what you and the world are paying for isn’t a once-in-a-lifetime trip to Bali or a weekend with Grandma; it’s the right to get Command hooks delivered to your house in 12 hours. Whelan teaches a class at UW called Consuming Happiness, and she is fond of giving her students the adage that you can buy happiness—“if you spend your money in keeping with your values: spending prosocially, on experiences. Tons of research shows us this.”
Prime, she told me, clearly fails that test. Abstaining from flying for moral reasons—and there are many—cuts you off from some of the most important experiences of modern life. Abstaining from Prime for moral reasons—and there are many—returns you to a life you probably had less than a decade ago: going to the store, standing in line, lugging your bags on the train or up the stairs.
Prime’s neatest trick was making that life unimaginable. It has hastened the decline of the local small businesses we’d be shopping at if Amazon didn’t exist, and it has bought up so many other companies that even if you avoid Amazon.com, you’re probably still shopping at Amazon. It has rewired the way Americans think about what is possible to have, and how fast. It has placed all of us atop the flywheel. Some small number of us may emerge from the pandemic and realize we don’t need to be here. But many more—especially those with children, those living in rural areas, those with disabilities, those who work long hours—are stuck, running ever faster. I asked Whelan, who has three kids under 10, if she’d ever consider canceling Prime, given what she knows about how it short-circuits the consumer brain. She paused for a beat, then told me no. “Amazon is the service that keeps our life moving.”
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