Amazon has announced a new initiative called Buy With Prime that expands the reach of its Prime subscription service beyond the confines of Amazon.com – a significant change in its business strategy that could help it compete with its rival at fast growing Shopify.
Merchants who 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 buy directly from these stores while retaining the benefits of Amazon’s subscription service. Namely: free delivery, next day delivery and free returns.
Buy With Prime will provide 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 footprint in the logistics sector (the business of moving physical objects) and a way to avoid the rival e-commerce platform. Shopify (which allows merchants to quickly create their own storefronts).
A common complaint made against Amazon by merchants is that it tightly controls their customer relationships. If you sell your products on Amazon.com, you get the benefit of having your wares displayed in one of the largest storefronts on the internet, with programs such as Fulfillment by Amazon and Amazon Prime making delivery easier and more fast for you and your customers. But you also get Amazon looking over your shoulder, collecting data on what you’re selling, with the threat that it will clone your product and bankrupt you. (Pretty much what the company is accused of doing in various antitrust lawsuits.)
This is why Shopify has done so well against Amazon. It doesn’t have its own marketplace for shoppers (you don’t go to Shopify.com to buy toilet paper and curtain rods), but instead offers tools for small and medium-sized businesses to quickly build 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, potentially easing tensions with merchants. As an Amazon executive points out in the blog post announcing the initiative: “Enabling merchants to offer Prime shopping benefits on their own direct-to-consumer online stores is an exciting next step in our mission to helping merchants of all sizes grow their business.
However, these benefits are not free, and Amazon will charge merchants various undisclosed fees for offering Buy with Prime buttons on their sites. “With no fixed subscription fees or long-term contracts required, merchants can expand their selection or cancel at any time,” Amazon explains.