Amazon Buy With Prime Solves One Problem, Creates Another Larger Issue
Let's say a DTC merchant who is also a solid 3P brand on Amazon has a conversion problem on their own website. Now Amazon solves it for them. Now they have another problem - more reliance on Amazon.
A new story from Business Insider throws some light on the problems Amazon is having with Buy With Prime adoption.
It seems to me that Amazon is treating Buy With Prime adoption as a technology problem. As if they can "product" their way out of it.
I don't believe that's the case.
What does an Amazon-friendly brand value more than anything?
Reducing its reliance on Amazon.
How can Amazon do this?
Introduce credits and incentives to increase their reliance on Amazon Advertising, while at the same time taking share from Google and Meta. In this space, the wind could be at their backs more than trying to focus on conversion.
Merchants want to understand how their customers can migrate from Amazon to their own website. More than anyone, Amazon could provide them with a data clean room to do that.
Why does this not yet exist? Every merchant I speak with wants to understand how they can use Amazon to acquire customers for their website. The technology is not complex, but it still does not exist.
Instead Amazon is focused on asking merchants to pay out of their own funds to drive traffic to Amazon. At the same time they are selling Buy With Prime? This is madness, folks. Left hand, meet right hand.
That is Step 1.
Then at the same time, let Amazon MCF sink or swim on its own. With Amazon scale, it seems to me where there is a point where this would be a no-brainer. Scale, speed, amount of services. They just need to be patient enough.
How about this for a promotion? 20% back on your Amazon Advertising fees if Amazon drove the sale and its fulfilled by Amazon MCF.
Or the reverse: Or 20% off on your Amazon MCF fulfillment costs if the sale is driven by Amazon Advertising.
Would Lina allow this? ;-). This would get the attention of large brands.
That is Step 2.
and what is Step 3? Step 3 is to pause and take a breath. Focus on these two huge opportunities and do not dilute them.
I am not sure the existing conversion-related services are long for this world. Is this "Buy With Prime"? I'm not sure. But perhaps the Buy With Prime thesis is a much longer-term bet than Amazon originally thought.
These building blocks could get them faster traction.
Oh and one more thing. In the race between Amazon building merchant-facing services (BWP) and Shopify building/not-building a marketplace (Shop App) I struggle to say that Shop App is winning (especially since I have been so critical of it). More on this later. ;-)
