Amazon Expands Buy with Prime, Posing Challenges to Shopify and PayPal
After about a 10-month experimental period, Amazon is finally offering its Buy with Prime features to all eligible US-based sellers. This may be good news for Prime members and most e-commerce business owners, but it’s starting to affect competitor sites like Shopify as well as payment processing companies like PayPal.
No Longer Invitation-Only
Buy with Prime was introduced last April 2022 to select merchants for Amazon to test out whether the program is viable and would benefit sellers. After months of testing, the company has determined that Buy with Prime resulted in a 25% average increase in conversions and decided to roll it out publicly in the United States by January 31, 2023.
In a statement to Bloomberg, Buy with Prime Vice-President Peter Larsen says the increase in conversion will more than offset the fees Amazon charges for the checkout option. Amazon did not disclose the actual charges, but the cost per unit will depend on factors like weight, dimensions, and selling price.
The program is currently being rolled out in more platforms. Earlier this week, BigCommerce announced a Buy with Prime app that will allow its sellers to integrate the features to their storefronts.
How Buy with Prime Works
Buy with Prime allows sellers to add an Amazon checkout option to their e-commerce sites outside of Amazon. Thus, it allows Prime members in the United States to shop off Amazon using their Amazon Prime accounts. This carries with it the usual benefits such as the ability to use Amazon Pay and receive free, two-day delivery.
From a buyer’s perspective, it’s more convenient because Amazon already has important customer details such as the name, delivery address, and payment information.
From a seller’s point of view, the program allows them to attract more customers by integrating a highly trusted checkout option. All eligible products will have the Prime logo, adding more familiarity to Prime customers, which are shown to spend significantly more on average compared to non-Prime users. It also gives them access to Amazon’s logistics features because the company takes care of the packaging, deliveries, and returns of orders made through Buy with Prime.
Competitors Are on Their Toes
Shopify shares declined shortly after Amazon announced that Buy with Prime will become available to all US merchants. The program is in direct competition with Shopify’s own fulfillment network, and the latter has expressed other concerns about the feature.
Last year, Shopify warned its sellers that it considers the integration of Buy with Prime as against its Terms of Service. It also cautioned against the dangers of Amazon’s ability to access and steal customer data, although Amazon insists customers’ personal information is secured.
A recent survey reveals that Buy with Prime is “a significant threat” to Shopify. Around 40% of the sellers surveyed already sell on Amazon, and 15% of them already use Buy with Prime. In addition, 74% of those surveyed said they would consider using the feature.
On the other hand, Buy with Prime is also posing threats to other online payment options such as PayPal. The company’s transactions are expected to decrease with Amazon Pay becoming more available. While Buy with Prime does not replace a site’s native checkout, with the ease and convenience of paying using Amazon Prime, PayPal is definitely facing a worthy opponent.
Even Reviews Can Be Exported
Amazon is bringing more than just the Prime logo to other e-commerce sites. It’s also rolling out an additional feature, allowing sellers to display reviews and ratings from their Amazon product listings. The feature, called Reviews from Amazon, comes at no additional cost to sellers who integrate with Buy with Prime.
The Motley Fool called it a genius move, and it might be so because the program’s current features, as well as any additional ones Amazon will roll out in the near future, essentially turn more platforms into smaller versions of the marketplace.