Amazon is playing 4D chess now

Amazon’s Buy With Prime program stands to benefit both Amazon and third-party sellers.

When somebody visits Amazon, there’s a good chance they’re going to buy something. Check out these conversion rates:

  • 74% for Prime members
  • 13% for non-Prime members
  • 3%-6% for other ecommerce sites

Now, Amazon’s bringing its one-click formula to third-party sites.

“Buy with Prime”, which allows ecommerce sites to integrate with Amazon’s checkout, payment, and shipping services, will be available to all eligible US merchants by Jan. 31. For Prime members, that means free shipping, free returns, and one-click checkout.

A boon for Amazon?

During a pilot program, Buy with Prime increased shopper conversion rates by 25% on average, with some sellers reporting 30%+ increases.

Meanwhile, Amazon reaps payment processing fees from Buy with Prime purchases, expanding its total addressable market (TAM) to the entire ecommerce market — not just products sold on Amazon.

The company needs the boost: Amazon announced layoffs of 18k employees this month, and investors have been discouraged by its slowed growth.

The impact on Shopify

Ecommerce competitor Shopify has its own one-click payment offering, Shop Pay, which facilitated 137m+ orders in 2020.

But if its merchants adopt Buy with Prime instead, Shopify’s revenue growth may be at risk — especially if Amazon’s offering sees higher conversion rates than Shop Pay.

A perk or a drawback? Buy with Prime will also allow merchants to display reviews from Amazon.com on their own site, but they won’t be able to hide the bad reviews.

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