Amazon Prime Membership: Is It Worth the $99 Annual Fee?

Last year, Amazon (AMZN) celebrated its 20th anniversary with a one-day online shopping event with a number of deals that rivaled Black Friday. On Tuesday, July 12, Amazon will be hosting its second annual Prime Day with over 100,000 deals worldwide.

New and existing Amazon Prime members will have the ability to shop the site for exclusive deals starting at midnight, with new deals becoming available as often as every ten minutes. Additionally, from July 5th through July 11th, Amazon will be offering countdown deals including gadgets; products for summer travel, foodies, and outdoor living; back-to-school and in-home essentials; and daily deals on top TV series and blockbuster movies available to instantly stream through the Amazon Video app.

These deals are definitely appealing, but is it worth signing up for Amazon Prime to get them?

Click here to sign up for Amazon Prime.

One of the biggest perks of an Amazon Prime membership is free two-day shipping and, for some zip codes in major cities, free same-day delivery on eligible items with no minimum order size. Additionally, one-day shipping can cost as little as $2.99 per item, and Saturday shipping as low as $7.99 per item. Shipping benefits can be shared with up to four additional family members or, with Prime's work option, four coworkers.

Without Amazon Prime membership, you will be paying $12 on average for two-day shipping on each purchase. If you typically buy one item each month from Amazon using two-day shipping, you would be spending at least $114 a year, making an Amazon Prime membership worth the cost.

If you don't always need items right away and opt for standard shipping instead ($6 on average), you would need to make at least 16 purchases a year to make an Amazon Prime membership pay off.

If you liked this article you might like

Best Buy CEO -- We, Together With Amazon, Will 'Kill' the Competition

How to Invest Just Like a Millionaire

Kohl's to Accept Amazon Returns in 82 Stores and Yet Stock Does Nothing