NEW YORK (TheStreet) -- Amazon (AMZN) has surely proved that it considers itself much more than an e-commerce company, but nearly every single move from the company can be tied back to one single thing -- Amazon Prime.
Amazon's most recent move is producing its own grocery products such as milk and household cleaners, according to The Wall Street Journal. One of the possible implications of such a move would be that Amazon would have more control over the production and fulfillment of products, a key priority for Prime.
Though there have been reports that Amazon is altering its rules that require a third-party seller to house products with Amazon in order to be eligible for Prime, by owning the product itself, Amazon will be able to more easily ensure a timely delivery for Prime members.
Amazon unveiled Prime in 2005 as a fast-shipping service but it has since evolved into a full-fledged membership program, including music streaming, original TV shows, and online storage. The thing with Prime, which costs $99-a-year, is that it reels in valuable consumers and turns them into loyal Amazon shoppers. Once they're hooked on free shipping, they're likely to spend more on the site and veer away from other retailers offering similar products.
ITG analyst Steve Weinstein estimated that Prime members spend $1,000 more a year on average compared to non-Prime members, and Millward Brown estimates Prime members have almost five times the conversion rate of non-Prime members.