Amazon have launched Buy With Prime, a new feature that directly targets Shopify, their main competitor as an online sales platform. Although in the same market, Amazon and Shopify differ in how they offer their services. Amazon serves as an online marketplace that allows sellers to sell their items through their marketplace alongside other retailers, whereas Shopify is an ecommerce platform, where merchants build their own online store.
SHOPIFY VS AMAZON
Amazon’s new feature Buy With Prime is designed to directly compete with Shopify, who are increasingly challenging Amazon’s dominance in the market. In 2018, Amazon was four times larger than Shopify, however in the last quarter of 2021, Shopify were almost half as large as Amazon with 48% of Amazon’s gross merchandise volume (GMV). With such an impressive increase in market share, Amazon have had to respond.
Shopify is a subscription service where merchants pay a monthly fee (depending on their plan), to use Shopify’s software to build an online store. It is relatively easy to set up and merchants can sell their products via a number of platforms, not only on their own website, but through social media and blogs as well. Once merchants receive an order, they select a carrier and drop them off for shipping.
With Amazon, merchants can either fulfil orders themselves, similar to Shopify, or they can use Amazon’s Fulfilment by Amazon (FBA), where products are stored at Amazon, and they fulfil the order. Whichever method the merchant uses, their products are sold through Amazon’s website, or at least that was the case until the introduction of Buy With Prime.
BUY WITH PRIME
Amazon’s drawback has been Shopify’s gain, allowing merchants to use multiple platforms to sell their goods, whilst Amazon customers can only make purchases through their website. The introduction of Buy With Prime addresses this issue, allowing merchants to sell on their own online store. This service is available to Amazon Prime members, a subscription service for buyers, that offers discounts for various products with free delivery, as well as other benefits such as access to Amazon’s streaming service.
Amazon’s prime members can now shop for products on a merchant’s online store, where the prime logo is displayed, the product can be bought using Amazon Pay and use Amazon’s fulfilment network to deliver the product. This new feature will also allow retailers to receive information about the purchaser, including their email address, which will allow merchants to build up a relationship with their customers.
CHALLENGE TO SHOPIFY
Amazon is noted for its low prices and quick fulfilment process, something that benefits buyers more than sellers. Whereas Shopify seems to have prioritized the merchant, building an easy to use and flexible platform for retailers to sell their products. In order to maintain or increase its market share, Amazon still needs to attract merchants as well as buyers. It could be that Buy With Prime addresses this issue, offering greater flexibility for retailers. Though it remains to be seen whether this new feature with stymie the flow of Shopify’s encroachment into Amazon’s territory.
Buy with Prime - Explosive Development for Ecommerce [Amazon News]