24/7 Wall St. Insights

• Amazon.com Inc. (NASDAQ: AMZN) Prime membership benefits now include savings on fuel.
• The new gasoline deal may be a challenge to Costco Wholesale Corp. (NASDAQ: COST).
• Also: 2 Dividend Legends.

The benefits of an Amazon.com Inc. (NASDAQ: AMZN) Prime membership center around its two-day free delivery, special deals on items sold on America’s largest e-commerce platform, and the Prime Video entertainment streaming service. Most people pay $139 a year for these benefits. Add to those discounted gasoline savings at the pump.

Amazon’s estimate puts the average driver’s gasoline savings at $70 annually. This is based on $0.10 per gallon at approximately 7,000 BP, Amoco, and ampm locations. Electric vehicle (EV) benefits will be added next year. Jamil Ghani, vice president of Amazon Prime, commented, “We’re constantly looking to add more value for Prime members and perhaps the broadest and most popular additional benefit we could offer is fuel savings—we’re excited to give this to Prime members.”

Amazon’s new gasoline deal may target Costco Wholesale Corp. (NASDAQ: COST). Costco has a gas-savings program that gives members discount savings of $0.15 to $0.20 a gallon. According to the National Retail Federation, Costco’s annual revenue is $234 billion, which puts it third behind Amazon at $360 billion and Walmart Inc. (NYSE: WMT) at $635 billion. Of course, only two of those companies make most of their money at physical stores.

Amazon’s new gasoline program gives it an edge as it competes for customers. It adds to the suite of benefits already led by the second-largest streaming service in the country, based on subscribers, trailing only Netflix Inc. (NASDAQ: NFLX).

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