Amazon has the one oasis which is the ecommerce business. From that one oasis, it has created multiple plays. One of the finest is the AWS, the hosting business. But today, we are learning about another product which has the potential to rewire the architecture of US ecommerce: Buy With Prime.
“Amazon is pushing Prime membership benefits beyond its own platform, launching a Buy With Prime feature that provides Amazon’s payment and fulfillment services to independent merchants. The move will allow stores to add a Buy With Prime button to their sites. When Prime members purchase products using the option, Amazon will help fulfill the order and offer free shipping, next-day delivery and free returns. It’s the e-commerce giant’s bid to expand its footprint in the logistics sector, while also fending off rival e-commerce platform Shopify.”
This is a unification of retail in the digital space. So, if you are shopping on a website and see Buy with Prime, you can sign-in with Prime, and buy, and Amazon will take care of everything for that merchant, delivering its best-in-class service for you. This is a frontal attack on Shopify because of the logistical frictions Amazon will remove from the playbooks of merchants.
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Amazon is peerless on building around the one oasis, and creating plays as standalone products for the market; I explained this in Harvard here. It is a winning playbook!
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Comment: Buy with prime sounds interesting. The challenge with the volume of products offered at Amazon seems to be the large number of products that are not differentiated. How would vendors use this product to be visible and drive sales? Is this something that lives outside of the Amazon.com domain?
My Response: I think the key thing is this: if you are a merchant and sign up as a Prime partner, you can integrate this feature on your website. Then move your warehouse to Amazon fulfilment center. With that, Amazon handles all the logistical activities. This is a good playbook: merchants can focus on production while Amazon handles the distribution for small fee.
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Amazon is going for other people’s money, quite scary. It also tells you that you don’t rest once you get very big, because the only way to remain big is by expanding. Netflix knows the scores right now…