Amazon has announced a new initiative called Buy With Prime that extends the reach of your Prime subscription service beyond the limits of amazon.com — a significant change in its business strategy that could help it compete with fast-growing rival Shopify.
Merchants that ship products using Amazon’s warehouse and delivery services (known as Fulfillment by Amazon) will be able to add Buy with Prime buttons to their sites. This will allow Prime subscribers to shop directly at these stores while retaining the benefits of Amazon’s subscription service. Namely: free shipping, overnight delivery and free returns.
Buy With Prime will offer additional convenience and value to Prime subscribers, but its importance to Amazon goes beyond generating additional Prime revenue. The launch of Buy With Prime is also an expansion of the company’s considerable presence in the logistics sector (the business of moving physical items) and a way to prevent rival e-commerce platform Shopify (which allows merchants quickly build your own storefronts). ).
A common complaint merchants make against Amazon is that it tightly controls their customer relationships. If you sell your products in amazon.com, you get the benefit of displaying your products in one of the largest storefronts on the internet, with schemes like Fulfillment by Amazon and Amazon Prime that make delivery easier and faster for both you and your customers. But it also has Amazon looking over its shoulder, collecting data on what it sells, with the threat that it will clone its product and put it out of business. (Pretty much what the company is accused of doing in various antitrust lawsuits.)
That’s why Shopify has done so well against Amazon. It doesn’t have its own buyers’ market (you’re not going to shopify.com to buy toilet paper rolls and curtain rails), but instead gives small and medium-sized businesses tools to quickly set up their own stores, while replicating, in theory, the ease and simplicity of the Amazon shopping experience.
However, by offering Prime benefits on merchants’ own sites, Amazon is loosening its grip on that customer relationship somewhat, which could ease tensions with merchants. As an Amazon executive points out in the blog post announcing the initiative: “Enabling merchants to offer the benefits of Prime shopping in their own direct-to-consumer online stores is an exciting next step in our mission to help merchants of all sizes grow their business.”
However, those benefits aren’t free, and Amazon will charge merchants various undisclosed fees to offer Buy with Prime buttons on their sites. “Without a fixed subscription fee or long-term contract, merchants can expand selection or cancel at any time,” says Amazon.