Amazon (AMZN) has often been accused of discriminating against third-party sellers on its site. But now it’s launching a new service designed to help both other retailers and its own Prime customers.
The service is called Buy with Prime. Retailers will be able offer some of the same benefits to Prime customers that Amazon does, such as free one- or two-day delivery and free returns.
Retailers will be able to use Amazon’s fulfillment network to make deliveries. The retailers can put the Prime logo on their web sites next to the items that are available for Prime treatment.
Prime members get the convenience of using the shipment and payment information stored in their Amazon accounts when checking out.
Amazon Prime costs consumers $14.99 per month or $139 a year.
“Buy with Prime will initially be available by invitation only for merchants using Fulfillment by Amazon (FBA) and will roll out through 2022 as merchants are invited to participate, including those not selling on Amazon or using FBA,” Amazon said in a statement.
FBA allows merchants to pay a feed to store their inventory in Amazon’s warehouses and to utilize its shipping capabilities.
“For merchants already using FBA, Buy with Prime can be added to their online store within minutes because their inventory is already stored in Amazon fulfillment centers,” Amazon said.
Payment System
Buy with Prime will allow merchants access to e-mail addresses for customer orders, allowing the merchants to create direct relationships with customers.
“Merchants simply pay for what they use,” the company said. “Pricing is based on a service fee, a payment processing fee, and fulfillment and storage fees that are calculated per unit. With no fixed subscription fee or long-term contract required, merchants can expand selection or cancel at any time.”
The new service is set to be compatible with most online stores, including e-commerce service providers such as BigCommerce, Amazon said.
Enhanced Delivery Network
For Amazon, Buy with Prime helps it expand its role in the delivery network.
It already has a transportation system with its own jets, trucks and drivers.
“This is a step forward in monetizing its logistics,” Bob O’Donnell, chief analyst at Technalysis Research, told TheStreet.com. “Amazon has built its own logistical infrastructure that’s very hard to replicate, and now it’s offering that to others.”
It’s a similar strategy to Amazon building a service to meet its internal technology needs and then turning that into Amazon Web Services to sell to others, he said.
“This is a logical extension of that same kind of thinking. Now Amazon is competing against UPS (UPS), FedEx (FDX) and the postal service.”
The author of this story owns shares of Amazon.
