By Jeffrey Dastin

(Reuters] – Amazon.com Inc. (NASDAQ) will release its fourth quarter holiday results on Thursday. A key question for the retailer is whether it will increase the cost of Prime, the fast-delivery media and Prime subscription.

Analysts believe that the company is entitled to do this. Amazon was forced to offer higher salaries and sign bonuses in order to lure workers during a time of shortage. Because it couldn’t get its products to the warehouses, Amazon had to pay more for shipping. Steel for construction costs more.

Amazon projects an operating profit range of $0 to $3 billion. However, analysts believe it may land closer to the upper end, around $2.5 billion according FactSet. Analysts expect Prime to see a price increase soon. Four years ago, the annual fee for U.S. subscribers was $119, up from $99; four years earlier they were $79.

Michael Pachter from Wedbush securities said, “It is about time.” Shipping costs are on the rise, for good reason.

Evercore ISI analyst Mark Mahaney said that pitching for a price increase would be simple: Fuel is more costly, trucking costs more, and the goods are more expensive. He said that subscribers – which number more than 200 millions worldwide, and include a large portion of U.S. households, would be willing to pay higher prices for faster delivery. Amazon could potentially make billions from this.

Mahaney stated, “They are pricing powerful because their value proposition is strong.”

Rival Netflix Inc. (NASDAQ:) also raised the U.S. standard rate weeks before.

Amazon did not comment on Prime pricing. Brian Olsavsky (Amazon’s CFO) stated in October that the retailer did not have a price increase to announce but said “we always consider that.” As points of consideration, he cited Prime’s price and the length of time since Amazon raised its prices.

He did not mention reliability as one of the key factors. Amazon workers said they would reconsider raising prices until the operation returns to normal. This was despite some shipping delays. Amazon had not recently added any major Prime benefits and hasn’t made one-day delivery the standard it promised nearly three years ago.

“Given all of the Q4 delivery challenges, raising the price of Prime doesn’t seem appropriate,” said Scott Jacobson, a former senior manager at Amazon, who is now at Madrona Venture Group.

It all comes down to numbers, he stated. Prime is more valuable than any fees because it changes customers behavior and encourages them to spend more Amazon.com to get the best out of their membership. Is the extra revenue from subscriptions worth more than any loss in spending for those who leave?

Amazon claimed that it worked hard to reduce the impact of pandemics and other operational problems on customers. Amazon claimed that it added prime benefits in recent years, including savings on prescriptions when customers don’t have insurance and faster delivery. It also said it had expanded its stream of popular programs.

Amazon may reveal the root cause of its latest problems in Thursday’s results. It could be due to a surge or ongoing labor shortage, or both. National Retail Federation reported that holiday sales rose by 14.1% between November and December. This is more than its forecast.

Omicron’s COVID-19 variant has also seen a significant increase, though it is still at the tail end Amazon’s U.S. holiday peak.

“You’ve got to believe that Amazon got hit heavily,” Pachter said, agreeing the company’s delivery uncertainties complicated a Prime hike.

“To increase my price, when I actually ordered some hot sauce and it took almost nine days for it to reach me, that would be an eye-roller.”