Did Shopify Turn to Amazon for Its Fulfillment Savvy?
Amazon and Shopify are playing nice, forging a deal that gives Shopify’s merchants access to Amazon’s fulfillment services and enables them to integrate the “Buy with Prime” service within their online store—all without having to sell on Amazon.
The app started rolling out as invite-only to select Shopify merchants Wednesday, and it will be available to all U.S.-based Shopify merchants who are already using or want to use Amazon’s fulfillment network by the end of September.
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Launched in April 2022, Buy with Prime allows Prime members in the U.S. to shop directly from merchants’ online stores and use the features of the program without accessing Amazon itself.
The Buy with Prime app for Shopify gives Prime members the option to select Buy with Prime on a product’s detail page before completing their order within Shopify Checkout. After signing into their Amazon accounts, Prime members can pay for their orders using a payment method from their Amazon wallets and Shopify Payments will process the payment through Shopify Checkout.
The integration represents a stark switch in mindset from last year, when Shopify merchants that attempted to embed the coding of the Buy with Prime button into their site were met with a warning message that it would violate the company’s terms of service. Buy with Prime is a competing product of Shopify’s instant checkout and payment service, Shop Pay.
“It’s clearly a concession that they couldn’t get fulfillment to work on their own,” Sucharita Kodali, vice president, principal analyst at Forrester Research, told Sourcing Journal. “I wonder if this was actually pressure from the merchants who had been asking for this for years and Shopify wasn’t in a position to say no and not have an alternative offer.”
For Shopify, the move comes after the e-commerce company effectively exited the logistics industry when it sold off its e-commerce fulfillment business Deliverr and warehousing robotics unit 6 River Systems to Flexport and Ocado, respectively. At the time of the divestments, CEO and co-founder Tobi Lütke called the logistics ambitions “side quests,” with the online giant instead opting to focus primarily on areas that power the front-facing side of Shopify merchants.
Amazon had already been more willing to develop partnerships with other e-commerce storefront technologies, integrating Buy with Prime with BigCommerce and WooCommerce.
“We’ve been thrilled with the feedback merchants have shared about Buy with Prime, including the increased shopper conversion and new shopper acquisition,” said Peter Larsen, Amazon’s vice president of Buy with Prime, in a statement. “The build of this app was a collaboration with Shopify, and we’re excited to help merchants not only grow their businesses, but also save time and resources—all while giving Prime members even more places to enjoy their shopping benefits.”
Amazon and Shopify, while not direct competitors, offer similar platforms for third-party businesses to sell products online. The launch of Buy with Prime last year was even viewed as a decision to slow down Shopify’s momentum, with the latter often touting that its own services enable more brand autonomy.
In a video announcing the partnership, Shopify president Harley Finkelstein said Buy with Prime could further assist brands as they look to maintain their identity.
“This will give customers more flexibility in how they make their purchases from the independent brands they know, love and trust,” said Shopify president Harley Finkelstein, in a video announcing the partnership. “Most importantly, we’re giving merchants access to Prime members while also ensuring they keep 100 percent control of their brand and their customer data, all within the Shopify admin.”
Previously, Shopify merchants managed Buy with Prime independently of their Shopify admin. But now, the app can make it easier for these sellers to see their automatically synced orders, promotions, catalog listings and taxes within their Shopify admin.
As part of this integration, Amazon Pay will also be offered as a payment option within Shopify Payments.
Amazon’s expansion of Buy with Prime to a new slew of merchants comes as the company is undergoing its own fulfillment reorganization in an effort to cut costs.
The e-commerce giant appears to be seeking more ways it can get third-party sellers to use its logistics and fulfillment services, implementing a new fee for its recently revived Seller Fulfilled Prime (SFP) delivery program members in October. The SFP program enables these sellers to ship Prime-eligible products out of their own warehouses.
Earlier this month, the company brought back its Amazon Shipping ground delivery service, which was initially designed for shippers that didn’t sell products on the online marketplace. The pilot service, which put Amazon in direct competition with UPS and FedEx, was tested in major cities like New York, Chicago and Los Angeles starting in 2018 until it was discontinued at the start of the Covid-19 pandemic.
