It’s almost impossible to imagine that Amazon could look at the sprawling machinery of its Prime business and think, “Eh, it’s not big enough.” Yet the company’s latest plans could super-size its membership program by doing something it has never done before — take Prime shopping all over the web.
That’s the promise of Buy with Prime, a new capability that will let marketplace merchants offer signature Prime perks in their own online stores. Amazon prefers to call it a “member benefit,” however, and it’s easy to see why.
“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,” said Jamil Ghani, vice president of Amazon Prime, in a statement. “Members will have the flexibility to shop from merchants directly, all while enjoying the fast, free delivery, seamless checkout and easy returns they’ve come to know and love from Amazon.”
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That may help take the sting out of the subscription hike that started hitting members in February and March, which raised the annual fee from $119 to $139.
As for the merchants, some may welcome the expansion as well, especially those beset by supply chain problems. A recent Feedvisor survey revealed that, over the past year, 29 percent of brands struggled with their supply chain and other setbacks, from labor shortages to the lack of shipping containers, while facing increased demand from online shoppers.
While Amazon merchants weren’t immune either, the report revealed that 64 percent still saw a jump in sales and revenue. They credited the willingness to adopt new strategies. Nearly half, at 49 percent, had signed up for Fulfillment by Amazon.
These types of numbers must be music to Amazon’s ears, given its effort to cast itself as a champion of small business.
The new Prime shopping expansion plays into that as well. Peter Larsen, vice president of Buy with Prime, called it “an exciting next step in our mission to help merchants of all sizes grow their business — whether on Amazon or beyond.”
But antitrust critics, who already see Amazon as too dominant, may see it differently. As it is, the company regularly faces accusations of using sellers’ marketplace data unfairly against them. Now it will have eyes on activity on their websites, too.
According to the announcement, details like “shopper order information, including email addresses for customer orders” will be shared with the stores, so they can follow up with additional service and develop relationships. Though intended to be helpful, it also points to the tech giant’s visibility into who’s shopping, what they buy and how much they’re willing to pay outside of Amazon.
Pricing, often a lightning rod for anticompetition scrutiny, has been a fraught subject for the company. But Amazon might breathe a bit easier about it these days, thanks to a D.C. Superior Court. D.C. Attorney General Karl Racine accused the e-tailer of punishing sellers for charging less on their sites than in the marketplace. It was just dismissed in March, one month before Buy with Prime’s debut.
Now that it’s officially underway, the only thing holding it back is Amazon itself. The effort seems to be on a slow roll for now, with limited access on an invite-only basis and eligibility for U.S. merchants that use Fulfillment By Amazon.
But the scope is poised to go big. According to the company, it will be compatible with most online stores, like those powered by retail technology firm BigCommerce — which is a notable mention, fueling speculation that Buy with Prime is a direct attack on a rival for both BigCommerce and Amazon: Shopify.
The mere fact that fast shipping will reach more sites also looks like a boon for Prime membership figures, which already number more than 200 million worldwide, and could power growth across the organization.
As it is, the company pulled in more than $33 billion in profits last year, with net sales of nearly $470 billion across divisions, including devices, e-commerce, physical retail — which will soon include an apparel store in Los Angeles — advertising, cloud services and more.
In a letter to investors last week, chief executive officer Andy Jassy explained that “customers appreciated the role Amazon played for them during the pandemic, and started using Amazon for a larger amount of their household purchases.
“[But] this growth also created short-term logistics and cost challenges,” he wrote. “We spent Amazon’s first 25 years building a very large fulfillment network, and then had to double it in the last 24 months to meet customer demand.”
That may balloon even further still, if Buy with Prime takes off and turns the internet itself into one big Amazon Prime shopping destination.