In an April 21st press release Amazon announced a new initiative, Buy with Prime, which will expand Prime shopping benefits beyond Amazon.com. Buy with Prime is currently only available by invitation only for FBA sellers, and will roll out through 2022 as merchants are invited to participate, eventually including those not selling on Amazon or using FBA.
The new offering allows third-party sellers to use Amazon’s extensive shipping and logistics network to fulfill orders on their own DTC sites. The initiative will also appeal to Amazon’s 200 million Prime customers, who will now be able to receive the benefits of their Prime membership (such as fast, free shipping and free returns) on other participating merchants’ sites.
Amazon’s announcement came just two weeks before Shopify’s announcement on May 5th that it will acquire Deliverr, a California-based e-commerce fulfillment startup orginally designed to compete with Amazon FBA. Shopify’s $2.1 billion acquisition of Deliverr, shows that they are committed to competing with all elements of Amazon’s retail business.
How Prime Members Can Use Buy with Prime
Buy with Prime will allow US Amazon Prime members to shop directly from merchants’ online stores. Prime members will see the Prime logo and delivery promise on eligible products in merchants’ online stores. The customer can then order from the merchant and receive the Prime benefits they are used to on Amazon, including fast, free delivery, a seamless checkout experience, and free returns on eligible orders. To checkout, customers simply use the payment and shipping information stored in their Amazon account.
How Merchants Can Use Buy with Prime
Amazon’s VP of Buy with Prime, Peter Larsen, explains “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. 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.”
For sellers using FBA, Buy with Prime can be added to their online store within minutes because their inventory is already stored in Amazon fulfillment centers. The process for merchants looks like this…
- Sign up for the program (currently it is invite-only this an “interest list”)
- Link an Amazon Seller Central account
- Use Multi-Channel Fulfillment to offer one pool of inventory for multiple channels
- Link an Amazon Pay account to offer a seamless checkout experience for Prime members
Merchants will receive shopper order information, including email addresses for customer orders, which they can use to provide customer service and build direct relationships with shoppers.
Using Buy with Prime does come with a cost. The pricing is based on a service fee, a payment processing fee, and fulfillment and storage fees that are calculated per unit. There is no fixed subscription fee or long-term contract required, merchants can expand selection or cancel at any time.
Learn more directly from Amazon here: https://buywithprime.amazon.com/
Industry Opinions on Buy with Prime
Many experts in the eCommerce industry are already very enthusiastic about the Buy with Prime initiative. However, others are more skeptical about declaring the program as a success before it’s really started, as we have seen other Amazon initiatives start with a bang and fizzle out over time.
Here at Envision Horizons, we believe that the program will remain small at launch, but has the potential to grow into a lucrative Amazon initiative with time, as with AWS. However, our team also expresses some doubt regarding the difficulty of getting sellers to adopt the program. Buy with Prime could suffer a similar fate as the Amazon Pay initiative which fell flat compared to other Amazon programs.
FBA sellers are the current target to adopt Buy with Prime, and there is a lot of discussion about what type of sellers and brands stand to benefit the most from utilizing the new offering. Envision Horizons CEO, Laura Meyer, states “The Buy with Prime program could be a big opportunity for Amazon native brands to build out their own DTC websites. It could also be great for brands who are having issues with their 3PLs. With this new offering, brands could cut out their 3PL and use fulfillment by Amazon for their DTC website sales. Of course, the program is in beta so we’re still waiting to see things play out.”
There is also conversation about the tie-in between Amazon’s Marketplace traffic and Buy with Prime itself. One industry expert on LinkedIn suggests “If Amazon committed to surfacing Buy With Prime listings on Amazon automatically in some way, perhaps through your brand storefront, that could be big. If Amazon automatically entered Buy With Prime listings into a free tier of Amazon Advertising, that could be another idea. Perhaps a tie-in with Brand Registry.”
Buy with Prime is a hot topic after Amazon’s announcement, with many industry experts sharing their initial thoughts on the initiative. While there are mixed views on the announcement, most seem to agree that we are yet to see the full picture in terms of how Amazon plans to turn the program into a success.
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