Amazon's Buy With Prime: It's a Trap, But It's Probably Gonna Work
Buy With Prime: "It's a Trap" But Millions of Marketplace Sellers Growing DTC Will Adopt Like Moths to Flame
Let's get this out of the way first. Amazon released Buy With Prime. Of course it's a trap. But it's a trap that will be hard for many sellers to avoid.
Why? Conversion rate. I expect this will 2-3x typical conversion rate, and I expect Amazon already knows this. Fast free shipping and your account is already stored?
I can tell you, as a consumer I will be clicking this box wherever I find it. And that's Amazon's leverage.
Goodbye Paypal. Goodbye Shop Pay.
Most people when they evaluate this program will think about this program will think about the big players. Would someone like Walmart or Macy's ever adopt this?
Well of course not, we are not in those days where people don't see what's happening here. (remember Amazon used to host Target, ToysRUs).
Strategically for Amazon this has a number of advantages:
- Off-Amazon eCommerce is growing faster than on-Amazon eCommerce. Amazon gets to tap into this.
- Let's be honest, most 3PLs suck. And many independent DTC sites hate fulfillment. This completely takes this off the table for you.
- Merchants will get a lot less customer service when ecommerce buyers use Prime on your site.
- More inventory in Amazon's fulfillment centers = higher parcel volume = higher network utilization = lower fulfillment costs.
Merchants give up a lot for this. In particular, say goodbye to your own loyalty program. This affects some, but how many independent sites truly have trusted relationships with their customers?
The big question is:
- What can Shopify do about this?
I think basically nothing. As far as I an tell, it's just Javascript.
Shopify could respond with a "terms of service" violation but I don't expect that they will.
In short- many marketplace-oriented brands will adopt. Many others will wait and see what happens next, and quite a few will obviously never consider it. Ever.
Because it's still a trap.
