Amazon (AMZN) said on Wednesday that it’s offering Prime members a reduction on its latest health-care service — one other perk that ought to help bring more people into the web retailer’s ecosystem. The One Medical service, which generally costs $199 annually, will likely be available to Prime subscribers for $9 a month or $99 per yr. It provides members unlimited 24/7 access to virtual care in addition to in-person, and distant primary care services. Prime members can add as much as five people from their family to the One Medical plan for an extra $6 a month. Amazon bought One Medical in July 2022. “Anything that reinforces the worth of a Prime subscription – which is already certainly one of the good bang on your buck services on the market – needs to be positive Amazon over the long term,” said Jeff Marks, the Club’s director of portfolio analysts. “The One Medical addition won’t move the needle today, but Amazon’s business model is built on attracting people into its Prime ecosystem and offering quality services at competitive prices, making today’s announcement incremental,” he explained. To be certain, we usually are not highly focused on the corporate’s health-care initiatives just yet. Quite, the Club is more concerned with Amazon’s cloud revenue growth stabilization and the way management is unlocking efficiencies in its retail achievement network. It is also still early days for Amazon in health care. Before acquiring One Medical, the e-commerce and cloud giant bought medtech startup Health Navigator in October 2019 and online pharmacy Pillpack in September 2018. This can be a “step in the appropriate direction” for Amazon advancing its efforts in health care, said Tom Forte, analyst at D.A. Davidson. Although Forte mentioned, it could be harder to penetrate since the industry is very regulated. From an organization strategy standpoint, Amazon CEO Andy Jassy is “focusing Amazon as a service,” Forte explained, moderately than simply a first-party retail play, given the upper services margin profile. A growth a part of the corporate’s services business, the Amazon Web Services (AWS) cloud, has slowed recently but “that is somewhat a mirrored image of the economy,” the D.A. Davidson said. “Amazon already has a considerable business in health care today and it also shows its strategic priority for Amazon under Jassy,” Forte said, pointing to Amazon Pharmacy, One Medical, and the cloud computing customers it has within the health care space. “Health care has the potential to be very meaningful for Amazon given it is a large total addressable market.” In a D.A. Davidson August 2023 white paper, analysts said there’s “a greater than 10% probability Amazon can generate an incremental 100 basis points of revenue growth in 2026 by exploiting health care” through Amazon Pharmacy and AWS sales it generates from health care firms. Amazon offering a reduced subscription to One Medical’s services is a component of the corporate’s efforts to expand the broader Prime flywheel by leveraging its 167 million Prime members. The goal of the Amazon Prime membership is to offer individuals with “one easy membership, something that gives shopping, savings, streaming and now positive health outcomes, said Jamil Ghani, SVP of Amazon Prime in a CNBC interview Wednesday. (Jim Cramer’s Charitable Trust is long AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked a couple of stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
John Love, Vice President of Amazon Pharmacy, talks about healthcare delivery by drone during Amazon’s “Delivering the Future” event at the corporate’s BFI1 Achievement Center, Robotics Research and Development Hub in Sumner, Washington on October 18, 2023.
Jason Redmond | AFP | Getty Images
Amazon (AMZN) said on Wednesday that it’s offering Prime members a reduction on its latest health-care service — one other perk that ought to help bring more people into the web retailer’s ecosystem.
