Amazon has announced a new initiative called Buy With Prime that extends the scope of its Prime subscription service beyond the borders of Amazon.com — a major change in his business strategy that could help him compete with fast-growing rival Shopify.
Sellers who ship products through Amazon’s warehouse and delivery services (known as Fulfillment by Amazon) can add Buy With Prime buttons to their sites. This allows Prime subscribers to purchase directly from these stores while retaining the benefits of Amazon’s subscription service. Namely: free shipping, next day delivery and free returns.
Buy With Prime offers Prime subscribers additional convenience and value, but its importance to Amazon is about more than bringing in additional Prime revenue. The launch of Buy With Prime is also an extension of the company’s sizable footprint in the logistics industry (actually moving physical items) and a way around rival ecommerce platform Shopify (allowing merchants to quickly build their own storefronts). ).
A common complaint made by merchants against Amazon is that it closely monitors their relationships with customers. If you sell your products on Amazon.com, you get the benefit of displaying your wares in one of the largest storefronts on the web, with programs like Fulfillment by Amazon and Amazon Prime that make delivery easier and faster for both you and your customers. But you also get Amazon to look over your shoulder and collect data about what you’re selling, threatening that it will clone your product and put you out of business. (Virtually what the company is accused of doing in several antitrust lawsuits.)
This is why Shopify did so well against Amazon† It doesn’t have its own marketplace for buyers (you don’t go to .) Shopify.com to buy toilet rolls and curtain rails), but instead provides small and medium-sized businesses with tools to quickly set up their own stores, while in theory mimicking the convenience and simplicity of the Amazon shopping experience.
However, by offering Prime benefits on merchants’ own sites, Amazon is somewhat losing its grip on that customer relationship, potentially easing tensions with merchants. As one Amazon executive emphasized in the blog post announcing the initiative“Allowing sellers to offer Prime shopping benefits in their own direct-to-consumer online stores is an exciting next step in our mission to help sellers of all sizes grow their businesses.”
Those benefits aren’t free, though, and Amazon will charge merchants several undisclosed fees to offer Buy With Prime buttons on their sites. “With no fixed subscription fees or long-term contract, sellers can expand or cancel their selection at any time,” Amazon says.