What Amazon’s ‘Buy with Prime’ Expansion Means for Local Merchants

“Buy with Prime.” Those three simple words have the potential to change the fabric of the e-commerce space — if Amazon gets its way.

Amazon’s announcement that it would be allowing Prime members to shop on external brand websites using their saved checkout details, while still accessing Prime benefits like free, fast delivery and free returns, was met with hesitation within the direct-to-consumer community late last month. As the program rolls out, it will be available on an invite-only basis to Amazon marketplace sellers using Fulfillment by Amazon (FBA). Many small, medium, and large merchants that use FBA are already being invited to add the Buy with Prime button to their websites. 

The program will eventually expand to include non-FBA Amazon sellers, along with brands and retailers that haven’t been affiliated with Amazon up until this point. That puts Amazon’s march toward total domination in the retail space front and center, as the company sharpens its focus on monetizing its relationships with outside merchants rather than expanding its own fleet of physical storefronts.

“Buy with Prime essentially allows a more seamless checkout and purchase experience for Amazon Prime customers shopping directly on a D2C retailer’s website. It’s an extremely compelling new offering for D2C merchants,” says Chris Palmer, CEO of SupplyKick, a firm that partners with brands to optimize revenue on e-commerce marketplaces.

Palmer believes the Buy with Prime program could be very compelling for D2C merchants, especially as Amazon continues to build on the features, benefits, and adoption of its program.

Retailers that choose to participate by adding a Buy with Prime button on their websites would be responsible for paying service fees, payment processing fees, and fulfillment and storage fees. In exchange, smaller retailers get access to Amazon’s Prime membership base and they are able to improve their delivery offerings — a major pain point for physical retailers with online stores.

“The big winners here, besides Amazon, are D2C business owners, who are now able to retain all Amazon shopper and contact information on their websites—customer data that Amazon has previously been very guarded about,” Palmer says. “D2C brands are also going to increase their site conversion rates with the ability to now offer a known and trusted checkout process via Amazon Prime.” 

By offering Prime benefits to outside retailers, Amazon is giving small and mid-size businesses access to a simplified storage, delivery, order tracking, and returns process. 

“Buy with Prime is a natural evolution that makes sense—it’s the merger of Amazon FBA and Amazon Pay,” Palmer says. “Those combined now gives Amazon the ability to manage the entire order and fulfillment process on D2C websites so that the D2C brand doesn’t have to.”

Shopify and Amazon Face Off

Palmer predicts that Buy with Prime will accelerate Amazon’s growth and merchant adoption of FBA. It could also lead to a shift in order fulfillment volume from the third-party logistics companies that many merchants currently use for order fulfillment over to FBA. That’s good news for Amazon but bad news for third-party logistics companies and post-purchase experience platforms working primarily with mid-size merchants.

“I predict that e-commerce website builders like Shopify will experience some loss as Buy with Prime builds momentum, especially if Amazon starts to integrate Selz, an online store builder that Amazon acquired in early 2021,” Palmer says. “If Amazon can successfully pair online store building and easy payment, fulfillment, and delivery into one complete package, they would have a clear offering that would rival Shopify or anything else similar to Shopify today.”

Whether merchants using Shopify’s platform will be able to add a Buy with Prime button to their websites is still unknown. If a competitor like BigCommerce partners with Amazon on the program, that could be an additional trouble spot that Shopify would have to navigate.

“The Shopify vs. Amazon war is already hot, and now it’s only heating up further,” Palmer says.

Stephanie Miles is a senior editor at Street Fight.

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