Amzone Prime is breaking free from Amazon’s walls to power third-party websites. What is Amazon’s new reach?
While we often talk about bulls in china shops and other bulls running through neighborhoods, what about bulls running through entire shopping areas? Amazon has unveiled a new feature today that will allow you to see how big a bull you can be online.
Prime, Amazon’s membership-based program that offers fast and free shipping on many products on Amazon, is now officially outside the Amazon walls. Prime members who buy with Prime will be able to extend their Prime benefits, including fast and free delivery, no returns and seamless checkout, to third-party merchants via their websites and apps.
Alexa from Amazon was a great success
Amazon cannot guarantee this will be a huge hit. Amazon’s Alexa was a huge success, as was Prime on Amazon. Don’t forget about the Fire Phone or Amazon’s attempt to deliver food to your home, as well as other projects that were killed over time.
There is tremendous potential for the company. It is worth explaining what’s happening, the context and what it means, as well as what Amazon is getting that it didn’t have before and why it matters.
Amazon: Let’s start with the basics
Prime customers can buy with Amazon by starting with merchants who are already using Fulfillment By Amazon (FBA). This Amazon feature, which is similar to Amazon Pay, was previously available on Amazon.com. It is used by merchants to outsource shipping and logistics.
Amazon stated that it would be rolling out these retailers throughout the remainder of the year and, as 2022 progresses, it will also extend to those who are not currently using FBA or selling on an invitation basis with Amazon.
To find the Prime logo, users can search these online stores. Merchants can integrate while they wait by signing up and linking their Amazon Seller Central accounts, Multi-Channel Fulfillment, and Amazon Pay. Then, a JavaScript widget is installed. Amazon has access to merchants’ order data, but they also have access to theirs (more details below).
The entire amzone service operates on the same principle as AWS. It is based on SaaS pricing that includes a service fee, payment processing fee, fulfillment fee, and storage fee.
All of these fees are calculated per unit. Amazon states that merchants only pay for what they actually use. Amazon writes, “Merchants have the option to expand their selection or cancel at any moment.”
Amazon sees this as a way to provide Prime subscribers with more convenience and additional perks.
Jamil Ghani (VP of Amazon Prime), stated that the aim is to surpass Prime members’ expectations through more selection, exclusive deals and quality content.
We’re expanding the number of Prime members who can access trusted, convenient Prime shopping benefits that go beyond Amazon.
This will add even more value to our membership. Members will be able to shop directly from merchants while still enjoying fast, free shipping, seamless checkout and easy returns that they have come to love from Amazon.
It is also promoting it as part its strategy to develop B2B tools aimed at online merchants.
In the same announcement, amzone Peter Larsen, Amazon’s Vice President of Buy with Prime, stated that “For more than 20 years, I’ve been supporting small and medium-sized business with opportunities to grow.
We are excited to allow merchants to offer Prime shopping benefits to their own direct to-consumer online shops
This is a significant next step in our mission of helping merchants of all sizes grow. Shoppers can buy directly from merchants’ online shops through Buy with Prime.
This will enable merchants to build customer loyalty and brand loyalty, while also offering conversion-driving benefits such as fast, free shipping.
Amzone: Slow down, don’t rush
Like other slow rollouts at Amazon, the expansion and expansion of Prime has been underway for many years. In fact, it’s been going on for more than three years.
When Amazon announced a partnership to WorldPay in March 2019, allowing merchants to accept Amazon Pay alongside other payment options like credit cards and PayPal, Apple Pay, Apple Pay, and Google Pay, Patrick Gauthier (VP of Amazon Pay) was very coy when I asked about the company’s ambitions to expand Prime.
Instead, he pointed to a small trial it was conducting with All Saints fashion retailer, which was offering Prime shipping benefits to customers who were Prime subscribers.
Amzone: He said, “It’s been very successful in terms customer conversion and lift, as well as to capture new customers
“ It also ran another test in 2018 during Prime Day, embedding Prime links to third-party merchants and linking shoppers back to these merchants’ Amazon-based product listings.
This was to better understand the potential opportunities it may have. He said, “Yes, we have received interest from merchants if we decide to move further with Prime.” (Gauthier, a Western Union spin-out of Business Solutions, has since left Amazon to lead Convera.
Amzone: Prime is Amazon’s Prime agent for change
Amazon is notoriously vague about user numbers and revenue for specific products. The company’s last official numbers date back to April 2021 when its founder and CEO Jeff Bezos claimed it had 200 million members. It now claims it has “over 200 millions.”
Amazon Prime has been the most influential agent of change in Amazon’s universe. It’s the company’s primary (prime) method of building customer loyalty.
Customers have found Amazon Prime’s free and fast shipping options to be a significant lever to lower the barriers to online shopping. Prime members have a tendency to choose Prime over other products, due to the ease of Amazon’s search tool to find Prime-eligible products.
This has been proven to be so powerful that Prime-based products are more popular than cheaper ones that take longer to arrive or have shipping costs spelled out in the total price. Sometimes, it’s a combination of both.
Amazon has also used Prime to launch completely new product categories, including groceries and streaming media services. Amazon claims that Prime Video covers over 2 million songs, thousands and playlists, as well as thousands of podcasts and stations on Amazon Music.
Prime Gaming offers free games and books, plus unlimited photo storage with Amazon Photos. Prime Reading also includes more than 3,000 books and magazines.
Amazon Fresh and Whole Foods Market deliver groceries and Whole Foods Market pick up. Amazon Pharmacy provides prescription access and Amazon Pharmacy offer same-day delivery for 15 million products in the U.S.
It’s reasonable to wonder if Amazon will expand on that strategy, given how transformative Prime has been for Amazon.
If it begins with its core business, the Marketplace and the products that third-party sellers offer on Amazon, can it then expand to include Prime subscriptions to magazines, newspapers, other media, and online grocery shopping?
Third-party brands are not keen to conform to the Amazon template for presenting their products. This has been a major problem with Amazon.
Amazon has made efforts to remedy this over the years, such as this partnership with Adobe to help D2C brand using Amazon fulfillment customize their storefronts.
However, even if a merchant has a storefront that is “different” from the rest of Amazon.com, the bottom page will still show the same cookie-cutter river approach that Amazon uses across all of Amazon.com.
This attitude has led to a lot more business to Commercetools, Shopify and others that offer “headless” commerce solutions for merchants. They can build and manage storefronts with very little input and integrate as many third-party solutions as they want.
Amazon now cooperates with BigCommerce. Amazon is now allowing sites to be powered on their terms. This could prove to be a great option for many businesses, other than e-commerce.
Slow down, don’t rush.
Many examples show that Amazon is not the most popular company when it comes to launching new products. Amazon took years to add countries to its Kindle outside of the U.S. amzone is worth asking whether the slow-moving process has helped or hindered e-books’ growth, or if they were both and just cancelled out.
It is worth considering the Kindle when you consider how Amazon has built products that expand it to new frontiers like Prime. It is clear that the Kindle is a success.
Although Amazon is notoriously vague about sales figures, other estimates suggest that Amazon’s share of ereaders is approximately 68%.
However, e-books are still a small market in comparison to the overall reading market. Pew Research (admittedly using 2019 information) found that only 7% said they only read ebooks, while 37% said they only read printed books (37% read both). 28% of respondents read both.
It is possible that overall habits will change, but it may take time and may not be easy. Amazon makes a lot of money in the marketplace it has created. This could be a repeatable pattern with Buy with Prime.
Data is Amazon’s oil
Amazon has a fascinating data play that goes to the core of its growth.
Amazon gives merchants control over aspects e-commerce that they would not have if they sold directly through Amazon. They have control over personalization, pricing algorithms, user interfaces, and more. Amazon will also see their data if they have full control.
amzone is processing data about Prime subscribers, including key details about their shopping habits, behaviors, and interests across different sites.
This information can be used to help improve the product it sells on Amazon.com. The key point here is that this information is not public information.
TechCrunch was informed by a spokesperson that Amazon prohibits the use non-public information regarding products purchased with Prime shoppers in merchants’ shops for personalization or merchandising in the Amazon store.
However, it goes far beyond that. Amazon is a prominent player in online advertising. This area will potentially reap the benefits of richer datasets on browsing habits and shopping habits. Prime subscribers will have access to these data and will be processing Prime orders.
amzoneis also getting an opportunity to play an even larger role in the online world, identity management.
Google, Apple, and Facebook (Meta) have made some interesting moves at controlling “login” across sites and apps.
amzone created social graphs and user profiles across various walled gardens and benefitted those who control the log-in services.
This gives the concept a new twist and shows how Amazon could really control everything. Amazon could build the consumer graph based on buying activity, which is what Facebook would do if it focused its attention on the social graph.
Updated with comments about Amazon’s non-public data.
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