Insights

Amazon Just Revolutionized E-Commerce Once Again

Few companies have been able to upend the shopping experience as often as Amazon.com (NASDAQ: AMZN). It’s because of the e-commerce giant that consumers balk at completing an online purchase if they can’t get it shipped for free in two days or less.
Amazon is now poised to revolutionize the e-commerce experience again after announcing it is extending the benefits of its Prime membership loyalty program to third-party websites. Merchants who use Fulfillment by Amazon (FBA) will now be able to offer all the perks of membership to Prime customers on their own websites.

Image source: Getty Images.

Initially by invitation only, the program will enable third-party sellers on Amazon to offer their customers the Prime shopping experience without ever having to actually visit Amazon. All the perks of Prime — fast, free shipping and returns; checkout using Prime payment and shipping options; and order updates through Prime — will become available through the participating retailer’s website.
Amazon says it will continue extending invitations to sellers to participate throughout the year and envisions eventually extending the offer to retailers that don’t have an Amazon presence or use Amazon’s fulfillment services.
An end run around the competition
The new Buy with Prime program leverages Amazon’s logistics prowess while denting concerns over the rising cost of membership. While a Prime subscription is an indispensable benefit for many, with fees now costing $139 a year, it may be at a point where there’s a moment of hesitation before renewing the program.
Even though you get movies, music, books, and other services as part of Prime, it’s the free, two-day shipping that is the biggest draw. Customers who aren’t heavy users of the site may begin to question whether it’s still worthwhile to pay that premium, especially now that Walmart (NYSE: WMT) has a viable alternative in its Walmart+ program that’s only $99 a year.
However, extending Prime beyond the walled-off world of Amazon’s site could entice customers to stay as it opens up more choices for shopping.
The real benefit for Amazon, though, is to blunt the threat posed by Shopify (NYSE: SHOP), which has become more vertically integrated and continues to build out its own fulfillment and logistics platform.
The Shopify Fulfillment Network now offers small and medium-sized businesses a way to effectively compete against Amazon by introducing two-day shipping for a merchant’s customers, streamlined returns, and product storage.

Image source: Getty Images.

The camel’s nose under the tent
Buy with Prime still carries risk for participants. A perennial fear is that Amazon will use the data it collects about customer shopping habits and turn that information against the retailer by developing competing products. Now it will be able to not only gain insights into shoppers visiting storefronts on Amazon.com, but it will also be able to reach into the third-party retailer’s own site for that data.
So the real revolutionary development may not be so much about Amazon extending a new level of convenience and opportunity for customers and merchants, but rather in using its vast resources to infiltrate the competition and capture their off-site traffic patterns and transactions.
Logistics as a service could be the key competitive threat confronting retailers on and off Amazon.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns and recommends Amazon and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy. –

Few companies have been able to upend the shopping experience as often as Amazon.com (NASDAQ: AMZN). It’s because of the e-commerce giant that consumers balk at completing an online purchase if they can’t get it shipped for free in two days or less.

Amazon is now poised to revolutionize the e-commerce experience again after announcing it is extending the benefits of its Prime membership loyalty program to third-party websites. Merchants who use Fulfillment by Amazon (FBA) will now be able to offer all the perks of membership to Prime customers on their own websites.

Image source: Getty Images.

Initially by invitation only, the program will enable third-party sellers on Amazon to offer their customers the Prime shopping experience without ever having to actually visit Amazon. All the perks of Prime — fast, free shipping and returns; checkout using Prime payment and shipping options; and order updates through Prime — will become available through the participating retailer’s website.

Amazon says it will continue extending invitations to sellers to participate throughout the year and envisions eventually extending the offer to retailers that don’t have an Amazon presence or use Amazon’s fulfillment services.

An end run around the competition

The new Buy with Prime program leverages Amazon’s logistics prowess while denting concerns over the rising cost of membership. While a Prime subscription is an indispensable benefit for many, with fees now costing $139 a year, it may be at a point where there’s a moment of hesitation before renewing the program.

Even though you get movies, music, books, and other services as part of Prime, it’s the free, two-day shipping that is the biggest draw. Customers who aren’t heavy users of the site may begin to question whether it’s still worthwhile to pay that premium, especially now that Walmart (NYSE: WMT) has a viable alternative in its Walmart+ program that’s only $99 a year.

However, extending Prime beyond the walled-off world of Amazon’s site could entice customers to stay as it opens up more choices for shopping.

The real benefit for Amazon, though, is to blunt the threat posed by Shopify (NYSE: SHOP), which has become more vertically integrated and continues to build out its own fulfillment and logistics platform.

The Shopify Fulfillment Network now offers small and medium-sized businesses a way to effectively compete against Amazon by introducing two-day shipping for a merchant’s customers, streamlined returns, and product storage.

Image source: Getty Images.

The camel’s nose under the tent

Buy with Prime still carries risk for participants. A perennial fear is that Amazon will use the data it collects about customer shopping habits and turn that information against the retailer by developing competing products. Now it will be able to not only gain insights into shoppers visiting storefronts on Amazon.com, but it will also be able to reach into the third-party retailer’s own site for that data.

So the real revolutionary development may not be so much about Amazon extending a new level of convenience and opportunity for customers and merchants, but rather in using its vast resources to infiltrate the competition and capture their off-site traffic patterns and transactions.

Logistics as a service could be the key competitive threat confronting retailers on and off Amazon.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns and recommends Amazon and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!