Amazon: Buy with Prime Seen as a Step to Open Up Logistics Services to Outside Sellers
2022.04.22 16:21
Amazon (AMZN): Buy with Prime Seen as a Step to Open Up Logistics Services to Outside Sellers
Amazon (NASDAQ:AMZN) announced “Buy with Prime,” a new option that allows third-party merchants to offer free and fast shipping as well as other Prime membership perks directly to Prime members through their own online stores.
Amazon plans to make the new feature available by invitation only to stores using Fulfillment by Amazon at first – which allows merchants to ship their products to Amazon fulfillment centers and let the e-commerce giant handle the rest of the process which includes packing, shipping, customer service, and other.
Merchants who opt for the new option will display the Prime logo and the expected delivery date at their own web stores and allow customers to use Amazon Pay to purchase their products. Amazon will then pack and deliver orders through its fulfillment centers, and also allow free returns for certain orders.
“Buy with Prime is easy to add to most existing direct-to-consumer online stores, and will be rolled out by invitation only through 2022 as merchants are invited to participate, including those not selling on Amazon or using FBA,” Amazon wrote in an official announcement.
Amazon believes the new feature will help merchants reinforce their relationships with customers while providing them with access to its well-established logistics and shipping infrastructure.
BofA analyst Justin Post says this move opens up Logistics Services to outside sellers.
“Similar to how AWS (Amazon Web Services) began as an internal tool that Amazon later offered to business customers, we expect Buy with Prime to increase utilization of existing assets, adding a 4th leg to Amazon’s services stool. While low seller adoption due to competitive concerns and margins may be debate points, Amazon has strong seller relationships and has been able to increase fees for 3P sellers to ensure profitability (recently adding a 5% gas price surcharge). Buy with Prime may also help Amazon’s competitive position vs. Shopify (NYSE:SHOP), which has a similar payment option and, according to press articles, has shown interest in acquiring Deliverr (a logistics asset),” Post commented in a client note.
By Senad Karaahmetovic
