Amazon.com Inc announced a 17% increase in the price of Prime, its fast shipping and media service, for US customers, following a rise in wage and transport costs.
The ecommerce giant said the annual fee for a Prime membership in the US will go up to US$139 from US$119, the first price rise since 2018.
It did not make any announcement about Prime fees in other countries.
Chief financial officer Brian Olsavsky told reporters on a conference call that Amazon expects some Prime customers to cancel their memberships as a result of the price hike, but noted that retention loss "hasn't been large in the past".
He added that revenue per Prime member grew "significantly" during the pandemic.
The news accompanied results for the fourth quarter, which showed net income almost doubling from the year-ago period to US$14.3bn, primarily due to an US$11.8bn gain on Amazon's investment in Rivian Automotive, Inc., which floated via an IPO in November.
Revenue increased by 9% to US$137.4bn, beating market forecasts of US$137.6bn.
Amazon reported numbers for its advertising service separately for the first time, which showed ad revenue growing by 32% to US$9.7bn during the quarter.
The company saw strong growth in its cloud computing business, with revenue at Amazon Web Services surging nearly 40% to US$17.78bn, topping analysts’ estimates of US$17.37bn.
Looking ahead, Amazon forecast revenue of US$112bn-US$117bn for the first quarter of the current year, equivalent to a growth rate of 3%-8%. The guidance is below market estimates of US$120bn.
Amazon has struggled with labour shortages and has tried to attract staff by offering bonuses to new starters.
“As expected over the holidays, we saw higher costs driven by labor supply shortages and inflationary pressures, and these issues persisted into the first quarter due to Omicron," said Amazon CEO Andy Jassy.
"Despite these short-term challenges, we continue to feel optimistic and excited about the business as we emerge from the pandemic."
Amazon shares were 12.34% higher at US$3,119.94 in pre-market trade.