The Amazon Effect   //   January 12, 2023

‘Adapting to the changing times’: While sellers look to diversify, Amazon wants to keep them hooked with Buy With Prime

While Amazon wants ‘Buy With Prime’ buttons splattered on websites around the country, it is unclear how many merchants will be willing to adopt the e-commerce giant’s latest shopping widget.

This week, Amazon announced that Buy With Prime — its tool that allows brands to make products eligible for Prime shipping on their own website — will be available to all U.S. merchants starting on January 31. In its blog post announcing the broader rollout of Buy With Prime, Amazon said that the tool had increased shopper conversion by 25% on average since launching in April 2022 on an invite-only basis. To encourage more merchants to sign up, Amazon is also touting a new feature for Buy With Prime merchants: the ability for them to display reviews from Amazon on their own websites.

Two agencies that work with Amazon sellers told Modern Retail that while Buy With Prime has the potential to increase sales for brands, it does not appear to be a top priority for many of them. One agency head who helped a brand in its pilot test said that smaller brands are more willing to jump on the Buy With Prime testing bandwagon; it’s the larger brands that have been a little bit more cautious. In short, while Amazon is looking for more ways to monetize its excess fulfillment capacity, it may take time for Buy With Prime to gain wider adoption.

Chris Palmer, chief executive at SupplyKick, a firm that optimizes sellers’ sales on Amazon told Modern Retail that the Buy With Prime expansion is Amazon’s response to a shift in attitude among its sellers. That is, more Amazon vendors are wanting to diversify their sales platforms.

“They [sellers] want to sell off of Amazon, either on other marketplaces or via their own DTC, or retail channels. In light of that shift, Amazon is adapting to the changing times, and coming up with tools in a way that it can also monetize and keep the business in-house,” said Palmer.

A December survey published by Capterra, a division of Gartner, reported that 99% of small- and medium-sized retailers that currently sell on Amazon intend to sell on other e-commerce marketplaces including Walmart in 2023.

Susie Tew, director of e-commerce at Pattern who helped skincare brand Trophy Skin pilot this feature, said the brand on average saw a 30% increase in conversions on its Shopify store over a period of five months between July to November.

Some of the other companies that have started featuring Buy With Prime on their checkout pages include beauty brands like Bossy Cosmetics and Live by Being.

Tew said the overall response for Trophy Skin and a few other sellers that have started testing Buy With Prime more recently has generally been positive. “There is inherent trust of the Amazon brand, the Prime brand that most of us are familiar with. Prime shipping is very appealing to people. In terms of feedback, trust of the Prime badge and the expedited shipping is appealing to people,” she said.

But SupplyKick said the reactions from brands they work with has been more measured. “At least the portfolio brands that we work with, we actually need to be the ones to drive them to adopt Buy With Prime. And right now, it’s actually falling far enough down on their priority list behind other strategic initiatives that we’re not getting a lot of success,” said Palmer. Specifically, Palmer said that some of the portfolio brands SupplyKick worked with were worried that Buy With Prime “won’t move the needle” for them.

In the case of one publicly traded e-commerce site, Palmer said the firm had already invested heavily in their own fulfillment capabilities, and didn’t see the need to cede control to Amazon for the sake of taking advantage of Prime branding.

Palmer said this scenario would probably be true for most Fortune 500 companies or publicly-traded brands. “But there’s small- and mid-size that I think it makes a ton of sense for,” he added.

Additionally, in April 2022 when the feature was in beta, the Buy With Prime service was riddled with kinks, according to both Palmer and Tew. For example, shoppers couldn’t apply promo codes or coupons. Shoppers also couldn’t build a cart on a brand’s website using Buy With Prime — they had to click to add each individual item to their Amazon account.

“The ability to modify the button design couldn’t change much, so if the look and feel of a merchant’s DTC site wasn’t at all Amazon Prime, it was just strange to incorporate this other button,” he said. But all of these things have been addressed in meaningful ways over the last eight months, Palmer said.

Palmer said the main reason behind the wider rollout is tied to the excess warehouse and fulfillment space Amazon built during the pandemic. As e-commerce growth slows, Amazon is now looking for more ways to monetize this excess demand.

Tew agreed with Palmer. “I see it as a strategy play. They have a lot of warehouses, they’ve made a huge investment on the Amazon side, strategically with their warehouses and their inventory. And so [Buy With Prime] just gives them another lever for fulfillment and to capitalize on that,” she said.

Overtime, Palmer said that he anticipates more companies will adopt the feature, albeit at a slow and steady pace.

Tew cautioned that Amazon will have to remain competitive in terms of pricing to other fulfillment options. “But I think at scale this could be really attractive for brands,” said Tew.

She also said the feature could potentially see higher adoption from early stage startup brands. “We haven’t talked to tons, but those that are willing to kind of jump on the Buy With Prime tests bandwagon are the smaller- to medium-sized ones. It’s been some of the larger brands that have just been a little bit more cautious about it, just because they have more red tape, whereas smaller ones tend to be more nimble,” she explained.

Ultimately, this is a service that experts believe is a multi-year investment that is here to stay.

I don’t think that Buy With Prime is a flash in the pan experiment. I believe it is a structural enhancement to the capabilities that Amazon has to bring to the industry,” said Palmer.