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Continued growth is all but guaranteed by Amazon Prime

Amazon has seen tremendous growth in Amazon Prime memberships. The company is tight-lipped about its Prime membership numbers, but they wouldn't be expanding internationally if the program were not successful. During the second half of 2007, Amazon rolled out Prime to 3 international marketplaces (Japan, UK and Germany)

According to a research note by Jeetil Patel of Deutsche Bank,"Over the past year, services such as Amazon Prime have helped to shift consumer behavior, fuel cross-category shopping and consolidate wallet share into the hands of Amazon.com. This strategy has helped to accelerate user growth, purchase frequency and unit growth at the company in the past year, while the e-commerce market has deteriorated. Once again, we think Amazon Prime should fuel growth in 1Q 2008, based on shifting consumer behavior."

I've seen this growth first hand. I use Amazon's FBA program to fulfill my Amazon orders, which makes my items eligible for Super-Saver shipping and Prime members. In the 4th quarter of 07, 14% of my shipments were for Amazon Prime customers. So far in the first quarter of this year, 19% of my orders are going to Prime customers. Those are sales I would not be getting if I was self-fulfilling my orders.