Amazon Prime members who shop on Shopify can now elect to use Amazon’s Prime product delivery experience, including free delivery in Amazon trucks and a simple returns process, according to a news release on BusinessWire. The partnership between Amazon and Shopify comes as a bit of a surprise given how intensely they compete for business.
Although both companies are in the e-commerce space, Shopify and Amazon have very different business models. Shopify enables third-party merchants to offer and sell their products on its cloud-based e-commerce platform, whereas Amazon is a diversified business model that includes not only a merchant platform but also the selling of its own products and services.
Shopify merchants, particularly smaller businesses, now have an unprecedented opportunity to tap into Amazon’s vast customer base and logistics capabilities. The partnership will also leverage Amazon Pay within Shopify Payments, facilitating smoother transactions for Shopify merchants.
“This integration gives Amazon access to Shopify’s extensive merchant network, deepening Prime’s value to consumers while making it easier for many merchants to incorporate Buy with Prime into their operations,” said Daniel Keyes, Head of Merchant Services at Javelin Strategy & Research. “This move also comes after Shopify sold off its logistics unit early this year, and is likely part of Shopify’s reimagining its logistics strategy now that it is not handling all of fulfillment and its associated tasks itself.”
Many consumers have gotten used to the convenience of Amazon’s shipping system and returns but aren’t tied to actually buying products from the online giant. In effect, Amazon is acknowledging these customers by partnering with other e-commerce sites to offer its logistics services to smaller merchants.
Amazon’s offering of “logistics as a service” is part of a strategy of developing a product for in-house use, then licensing it to other companies. For example, PaymentsJournal reported on Amazon’s palm-reading payments technology, which it is putting in its Whole Foods locations and licensing to other companies, such as Panera Bread. Amazon’s move with Shopify is a similar move with its logistics network.
