Amazon vs. Shopify heats up as Amazon has recently announced that it was opening its prime shopping experience to third-party online stores.
They are introducing the ‘Buy with prime’ option to sellers outside Amazon.
This is big news as it will allow sellers to take advantage of Amazon’s FBA, free shipping, returns, and checkout with Amazon Pay, among many other benefits that customers enjoy with Prime Membership.
No doubt that sellers will find value in using Amazon’s vast fulfillment and logistics network.
But there are some serious questions about this move by Amazon.
✅ What does it mean for Shopify?
✅ Should Shopify allow the Buy with Prime in their stores
✅ Did Amazon do this to nip Shopify’s threat in the bud?
✅ How will sellers be affected by this move?
To find some answers to these questions, I am joined by my good friend and an Amazon expert, James Thomson. He recently stepped down from the company he co-founded, Buy Box Experts.
He helps us dissect what this latest move by Amazon means and how it might impact you as a seller.
This is a fascinating discussion that you don’t want to miss. 🎧 Tune In!
Why Is Amazon Doing This?
This is the billion-dollar question. Speculation is rife on what is the motivation behind this move. In the official press release, amazon claimed that they are offering consumers a wider selection and the other benefits they have come to enjoy and expect with Prime in a variety of online stores.
“We always aim to exceed Prime members’ expectations by offering more selection, exclusive deals, quality content, and convenient features,” Prime Vice President Jamil Ghani says in the news release. “With the introduction of Buy with Prime, we’re expanding where members can enjoy trusted and convenient Prime shopping benefits beyond Amazon, adding even more value to their membership.”
But James and I believe their real motivation lies elsewhere.
First, Amazon has invested heavily in warehouses and delivery networks. We are talking hundreds of billions of dollars.
They have successfully implemented free shipping and next-day delivery. They are even rolling out same-day delivery in some locations.
With their vast warehouses and the technology backing them, they have some capacity to handle even more orders. They are essentially offering this technology as a service at scale.
Amazon vs. Shopify
The second reason, and which many people believe informed this move, is to counter Shopify. Their recent growth spurt hasn’t gone unnoticed at Amazon.
Even though they are quite some distance away, Amazon can’t afford to ignore them at this point.
Shopify is quickly building its own fulfillment and logistics network across the country. They are investing substantial amounts of money to achieve two-day shipping.
Additionally, they have integrated their payment options to Google, Facebook, Instagram, and TikTok. The mission is to make its platform attractive to small online businesses.
Amazon is paying attention to all this, and they might have thought it’s time to counter the threat.
And what a better way to do it than to use their strength to their advantage. Their investment in warehouses and last-mile delivery is unrivaled.
What It Means for Prime Members
Prime members, without a doubt, will benefit from this development. The ability to shop in eligible online stores and enjoy the same benefits they do on Amazon is huge.
For starters, Prime Membership gives you access to free shipping, next day delivery, and free returns. All these are significant incentives and value for money compared to the membership price. ($15 a month)
Additionally, Amazon will mandate third-party sellers who choose to deploy the Buy with Prime button to offer Amazon Pay as an option at checkout.
With this option in place, most Prime members are likely to use it rather than give their shipping and payment information to untrusted online sellers.
Overall, this is a new perk for Prime members that increases their product selection and price competitiveness across different platforms and seamless checkout.
What it Means for Sellers
This can be both positive development and a not-so-positive one, depending on how you look at it.
What is not in doubt is that it will make fulfillment much easier for small and medium-sized merchants. It will also drive revenues by making it faster for prime members to checkout with their already stored shipping and payment information.
Even though sellers will pay for this service, the benefits outweigh the costs.
But for some sellers, using FBA is a risk not worth taking. With all the data Amazon will collect, it remains to be seen whether Amazon might use it to the detriment of merchants.
There are accusations of Amazon using data collected from sellers to sell its own private label products.
All in all, James and I believe that this is a positive development for most sellers. It will be a game-changer for many brands who use the Buy with Prime button.
Right now, this service is open only by invitation and to sellers already using FBA. Eventually, Amazon plans to roll it out to other retailers currently not in their FBA program.
Tune in to this exciting discussion as James and I try to dissect this development and look at all its implications.
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