Online retailers are getting shoppers to pay up-front fees in exchange for benefits --  and there are some major upsides to the strategy

Amazon Prime is the most widely known and used online membership program. And it’s been so successful for the company that other online retailers are now beginning to explore their own up-front, fee-based programs.

Google, Instacart, Jet, Sephora, and Thrive Market have each formed some type of members-only program for online shoppers that gives consumers added benefits in exchange for an up-front yearly fee.

In a new report from BI Intelligence, we define what an e-commerce membership program is and how retailers are taking the Costco model and updating it for the online shopping age. We also assess the advantages and disadvantages of e-commerce membership programs for the retailer, as well as what consumers might look for in these programs and what incentives are needed to get people to sign up. And we include examples of how some e-commerce companies are structuring membership programs and provide an outlook for other retailers and product categories that could benefit from employing the membership model.

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Here are some of the key takeaways from the report:

In full, the report:

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Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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