Amazon.com will let other online merchants piggyback on its Prime service to deliver goods quickly to their customers, reports CNBC. The company on Thursday launched a new service, Buy with Prime, that lets third-party merchants use Amazon’s vast shipping and logistics network to fulfill orders on their own sites, while also appealing to Amazon’s 200 million-plus Prime customers. Buy with Prime won’t be free for sellers, and pricing will vary depending on payment processing, fulfillment, storage and other fees.
To start, the service will only be available by invitation to sellers who use Fulfillment by Amazon (FBA). With that service, merchants pay to have their inventory stored in Amazon’s warehouses and to make use of the company’s supply chain and shipping operations. Eventually, it will be extended to other merchants, including those not selling products on Amazon.
Total Retail’s Take: Amazon’s wide-reaching and fast fulfillment network has long been the envy of retailers everywhere. Now, Amazon is letting other brands get a taste of its efficient supply chain — at a cost. With the e-commerce giant’s growing in-house logistics operations, many speculate that it aims to directly compete with major carriers like UPS, FedEx and the U.S. Postal Service. Other online merchants should evaluate their existing logistics options and see if it makes sense to move to this new Amazon service, says Bob O’Donnell, president and chief analyst at TECHnalysis Research.
“Sellers can potentially start to think creatively and do things like sell some of their lower-cost or mainstream options via Amazon, reserving their more specialized or customizable items via their own site,” O’Donnell notes. “That way they can maintain differentiation and uniqueness and ‘own’ their most important customers, but still leverage all the benefits that Prime shopping and logistics enable.”
Buy with Prime will allow millions of U.S.-based Prime members to shop directly from merchants’ online stores with the trusted experience they expect from Amazon, including fast, free delivery; a seamless checkout experience; and free returns on eligible orders. This program will ultimately increase selection and value for Prime members and help merchants grow their direct-to-consumer businesses.
“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,” said Peter Larsen, Amazon’s vice president of Buy with Prime.
Daniel Newman, principal analyst at Futurum Research, noted to Total Retail how Buy with Prime’s integration will enable sellers to link the highly coveted and trusted “Prime” buying experience with next generation web experiences.
“As we move to the next generation (web 3.0) of experiences that will be powered by augmented and virtual reality along with other forms of immersion, the desire to create owned commerce sites that integrate with leading logistics capabilities will be prudent,” Newman says. “The program will also allow brands to maintain control of the user’s interactive shopper journey.”