Amazon Prime and Shopify extend their reach into each other’s territories

Discussion
Source: Amazon
Jan 11, 2023

Amazon.com is looking for growth beyond its own platform.

The company yesterday said it was making its “Buy with Prime” program, which offers the same easy checkout, free shipping and returns on its platform, available to third-party sellers for use on their own sites.

Amazon, which first began offering Buy with Prime on an invitation-only basis in April, said that participating merchants increased shopper conversion rates by 25 percent on average by making the program available versus those without the option during the same time period.

Peter Larsen, vice president of Buy with Prime, wrote on a company blog, “We’ve seen some merchants, like Trophy Skin, report shopper conversion of more than 30 percent since adding Buy with Prime to their online store. Additionally, merchants such as Wyze have told us they are seeing a 25 percent higher conversion rate and have added Buy with Prime to all eligible products in their catalog. Hydralyte told us that after adding Buy with Prime, they have seen a 14 percent increase in conversion.

Amazon said that Buy with Prime merchants would now have the ability to display customer ratings and reviews from Amazon.com on their own online stores. Mr. Larsen said this functionality increases shopper conversion by enabling shoppers to make more informed purchasing decisions.

Mr. Larsen touted Buy with Prime’s interoperability with ecommerce service providers, notably BigCommerce, to enable merchants to add Buy with Prime without the need for coding.

Amazon is clearly looking to extend its reach into new revenue streams with Buy with Prime, even as the company has come under scrutiny from lawmakers from both major political parties for its business practices, including the alleged use of data from third-party sellers on its platform to develop its own private labels, which it prioritizes in search results.

Buy with Prime is seen by many as Amazon’s answer to Shopify. The Canadian company last week introduced “Commerce Components by Shopify” for enterprise retailers. It enables large organizations, such as Mattel, to choose from Shopify’s back office components and add them as needed.

“Commerce Components by Shopify opens our infrastructure so enterprise retailers don’t have to waste time, engineering power and money building critical foundations Shopify has already perfected, and instead frees them up to customize, differentiate, and scale,” said Harley Finkelstein, president of Shopify, in a statement.

DISCUSSION QUESTIONS: What impact do you expect Buy with Prime to have in the U.S? Will Commerce Components be well received by enterprise retailers and direct-to-consumer brands?

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6 Comments on "Amazon Prime and Shopify extend their reach into each other’s territories"


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Mark Ryski
BrainTrust

Buy with Prime is very compelling and a 25 percent lift in conversion will have retailers signing up. Amazon is making available some of the key features of what made them an online powerhouse and these benefits will accrue to brands that take part. No doubt that Amazon had both Shopify and government regulators in mind with this strategy that delivers a one-two punch on both fronts. I can see this being well-received by DTC brands as well as enterprise retailers over time.

Camille P. Schuster, PhD.
BrainTrust

The increase in sales will make this option attractive to many other third-party sellers. However this comes at a time when Amazon is getting criticism about all the third-party offerings on their site that do not deliver the same service and quality as Amazon controlled offerings. This move has the potential to be wildly successful or a nightmare for Amazon’s image.

Doug Garnett
BrainTrust

Couldn’t agree more. Amazon’s success is its own disaster — especially as search in Amazon is decreasing in value as advertising increases. That said, I expect they’ll have plenty of companies sign up. What we’ll need to watch is whether those companies stay. Most of my clients who work with Amazon feel like they’re dealing with the devil — they have to do it but dislike the risk.

Lisa Goller
BrainTrust

Buy with Prime will deepen third-party sellers’ digital sophistication and brand trust. Amazon will earn incremental B2B revenue by helping U.S. sellers delight consumers.

Commerce Components by Shopify will help enterprise retailers fill strategic gaps with tech to serve shoppers better.

Amazon and Shopify keep sellers modern, competitive and aligned with consumer expectations.

Ryan Mathews
BrainTrust

If that lift is accurate and sustainable Buy With Prime should have great success and an oversize impact on the industry as a whole, of course that’s a big if. As to Commerce Components, it’s going to need to prove itself. If it works — and I see no reason why it can’t — it could also change the market. But again, that may be a big if.

Anil Patel
BrainTrust

Amazon has been scrutinized for its use of third-party seller data. Given Amazon’s history of using its registered partner seller data to identify the latest trends in order to launch its own private labels, the “Buy with Prime” solution may pose risks to its registered partner seller. Moreover, with Amazon Prime, merchants will lose control over the fulfillment process, and completely relying on Amazon for the same may prove costly. On the other hand, Shopify has a large user base who are familiar with its features and also know how easy it is to implement Shopify’s plug-and-play Commerce Components. Therefore, in my opinion, Shopify will still continue to lead the market.

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