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Will Buy with Prime give Amazon an answer to Shopify?
Amazon.com is coming off an un-Amazon like quarter and that’s big news. Tucked inside Amazon’s first quarterly loss since 2015, however, was the introduction last week of a new program that may give third-party sellers another reason to do business with the platform instead of some of its rivals.
Buy with Prime is a new offering that enables marketplace sellers that participate in the Fulfillment by Amazon program to extend that experience to their own websites. That means the hundred of millions of Amazon Prime members will be able to go to a third-party site and get fast and free deliveries and returns.
Customers placing orders on Buy with Prime sites will check out their purchases with their payment and shipping information already stored in their accounts on Amazon.
“When we began using Fulfillment by Amazon, our business quadrupled in growth thanks to Amazon’s logistics network and our Prime-eligible listings. Using Buy with Prime, we will be able to drive the conversion we’ve experienced with Fulfillment by Amazon while running our business on our own site.” David Ghiyam, president of MaryRuth Organics, said in a statement.
“Allowing merchants to offer Prime shopping benefits on their own direct-to-consumer online stores is an exciting next step in our mission to help merchants of all sizes grow their business—whether on Amazon or beyond,” said Peter Larsen, vice president of Buy with Prime. “With shoppers purchasing directly from merchants’ online stores, Buy with Prime will allow merchants to build customer relationships and brand loyalty while offering conversion-driving benefits like fast, free shipping.”
Amazon has designed Buy with Prime to work with most online stores and e-commerce platform providers including BigCommerce.
“Prime set the bar for a shopping experience customers trust, including convenient and fast shipping. As one of the top ecommerce platforms collaborating with Amazon to add Buy with Prime, extending these benefits to our merchants will help elevate their online shopper experiences, build brand loyalty, and power them to grow and scale,” said Troy Cox, senior vice president of product at BigCommerce.
It doesn’t appear as though Buy with Prime’s functionality extends to the Shopify platform. Numerous articles suggest that Buy With Prime is Amazon’s response to growing competition from Shopify, the company that some have called the anti-Amazon. Shopify does not subscribe to that characterization.
Discussion Questions
DISCUSSION QUESTIONS: What will Buy with Prime mean for Amazon, its third-party sellers and other e-commerce platforms?
Poll
Loading …BrainTrust
Brian Delp
CEO, New Sega Home
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
By offering Buy with Prime, Amazon is fortifying its position with third-party sellers, and will no doubt attract more of them. The e-commerce marketplace has become crowded and competitive thanks to Shopify and others, so it makes good strategic sense for Amazon to create new and better incentives for third-party resellers to work with them vs. others.
Buy with Prime will drive incremental revenue for Amazon, but the big winners are consumers and merchants. For consumers, it makes shopping more convenient as they can use their stored address and credit card info from Amazon and it opens the door to more free shipping options on other websites. For merchants, Buy with Prime has proven to drive increased revenues.
Amazon has made extensive investments in its fulfillment network. Those investments are savvy, but they are expensive and, with inflation, are becoming even more costly. As such, Amazon needs to boost volumes. One way to do that is to open up the network to third-parties that do not sell on Amazon’s marketplace. Buy with Prime helps them to accomplish this. It is also a defensive move against the growth of alternative platforms like Shopify.
Amazon Prime offers economies of scale, reach, and fulfillment network capabilities to drive an outstanding customer experience and provide a cost-saving model for DTC merchants. The crucial element for DTC brands and independent retailers has been the ability to scale and fulfill products profitability.
The seamlessness and frictionless customer experience that Buy with Prime offers is a compelling alternative to Shopify for DTC brands. Additionally, the customer journey remains on the brand’s native app or website, with the checkout experience enabling a seamless connection to the Buy with Prime option.
Buy with Prime is a clear win-win scenario for customers, DTC brands, and Amazon.
AWS has been a huge revenue driver for Amazon. This will be no different. Third-party sellers and other platforms will be able to leverage Amazon’s brand recognition to provide confidence to their own consumers, so it’s a win-win — but a bigger win for Amazon in the long run. This sets Amazon up to further challenge Shopify.
Retail Logistics as a Service. RLaaS. Perfect. This is a win on multiple levels. Third-party merchants, customers and Amazon all win with Amazon selling what they know and do best — logistics.
For sellers, another payment method to help eliminate friction in the checkout process, and an opportunity to build their own brands in a way they can’t on Amazon.com.
For other platforms, another payment offering that will no doubt feel convenient to their customers.
But to Amazon? A lot more data. Customer data, order data. Don’t underestimate the gold that provides to Amazon.
And that’s why I think this will only yield marginal results for Amazon — “pay us to manage your inventory and handle fulfillment, and give us access to your customer data, so we can see what sells, copy it if we want to, and market directly to your shoppers” is a non-starter in a lot of places. Crazy, isn’t it?
However, if Amazon Logistics was a spun-off entity, that would be a true game-changer, countering not only UPS and FedEx but also Visa and MasterCard.
Location, location, location. Is there a better location than where 100 million customers gather?