Amazon to let other online retailers offer Prime delivery service directly on their sites

By Catherine Thorbecke, CNN Business

(CNN Business) – Amazon announced Thursday that it will let third-party merchants offer Prime membership benefits such as free and fast shipping directly to Prime customers through their own online stores rather than solely through the e-commerce giant’s platform.

The option, called Buy with Prime, will initially be available by invitation only for merchants already using Fulfillment by Amazon, the service that lets businesses send products to Amazon (AMZN) fulfillment centers and have the tech company handle the packing, shipping, returns and customer service.

Prime subscription members will see the Prime logo on eligible products in other merchants’ online stores, and they can choose to check out with the payment and shipping information stored on their Amazon account.

The move, which potentially loosens Amazon’s grip on other online merchants, comes as Amazon has faced renewed antitrust scrutiny in part for allegedly giving itself an unfair advantage over third-party sellers. Amazon has come under fire for allegedly using data from individual third-party sellers to inform the development of its own private brand products. Amazon has denied it does so.

With this new option, Amazon also appears to be taking aim at the rise of services like Shopify, which helps businesses run their own online stores. Demand for Shopify spiked during the pandemic amid a broader e-commerce boom. Shopify’s lure for many businesses was that it allowed companies to maintain closer relationships with customers and have more control over their online shops. (Shopify has seen its stock price fall considerably this year as its pandemic boom appears to ease.)

Shares of Shopify (SHOP) fell more than eight percent on Thursday.

Amazon is positioning Buy with Prime as a win for merchants who want to build their relationships with customers but still gain access to Amazon’s coveted logistics and shipping infrastructure.

“Allowing merchants to offer Prime shopping benefits on their own direct-to-consumer online stores is an exciting next step in our mission to help merchants of all sizes grow their business — whether on Amazon or beyond,” Peter Larsen, Amazon’s vice president of Buy with Prime, said in a statement Thursday. “With shoppers purchasing directly from merchants’ online stores, Buy with Prime will allow merchants to build customer relationships and brand loyalty while offering conversion-driving benefits like fast, free shipping.”

The Buy with Prime option will cost merchants an undisclosed sum that is calculated based on usage, the company said. No long-term contract is required.


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