Amazon will allow other online retailers to offer Prime delivery service directly to their sites

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

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

The move, which potentially loosens Amazon’s grip on other online merchants, comes as Amazon has faced new 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 label products. Amazon denied doing so.
With this new option, Amazon also appears to be aiming for the rise of services like Shopify, which helps businesses run their own online stores. Demand for Shopify has soared during the pandemic amid a broader e-commerce boom. The appeal of Shopify for many businesses was that it allowed businesses to maintain closer relationships with customers and have more control over their online stores. (Shopify saw its stock price drop significantly this year as its pandemic boom appears to be waning.)
Shares of Shopify (STORE) fell more than 8% on Thursday.

Amazon is positioning Buy with Prime as a winning solution for merchants who want to strengthen their relationships with their customers while gaining access to Amazon’s coveted logistics and shipping infrastructure.

“Enabling 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 at beyond,” said Peter Larsen, vice president of Amazon. Buy with Prime, said Thursday in a statement. “With shoppers buying directly from merchants’ online stores, Buy with Prime will allow merchants to build customer relationships and brand loyalty while providing conversion benefits like fast and 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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