Amazon: The King Of ECommerce


  • Last week Amazon announced that it will offer third-party merchants Buy with Prime, which expands Prime shopping benefits to merchants beyond Amazon’s website.
  • Amazon is investing significantly in its Logistics division, and I expect them to compete with the behemoths, FedEx and UPS.
  • In the last two years, Amazon spent $80B to improve Amazon Logistics, which was more than the previous five years altogether.
  • In this note, we’ll explore how Amazon plans to offer merchants and consumers more effective and enticing payment solutions with Buy with Prime.
  • This idea was discussed in more depth with members of my private investing community, Beating the Market.

Investment dissertation

Amazon: The King Of ECommerce

Now that Amazon (NASDAQ: AMZN) has announced the launch of Buy with Prime, Amazon will offer an attractive payout option at the point of sale to non-Amazon merchants and Prime members. Amazon will offer attractive payment options to merchants and consumers, including a strong network of merchants and online retailers benefiting from the Amazon Logistics Network, Fulfillment by Amazon (FPA) and more than 200 million Prime Amazon’s massive network. Members. Purchasing Prime will allow Amazon to increase its investment in its logistics and filing segments, as well as its quest to provide a robust digital wallet.


Over the past two years, Amazon has increased its investment in logistics and fulfillment operations. In last quarter’s revenue call, the company announced a 50% increase in its capacity. It follows 2020, seeing an 80% increase in Amazon CapX, which primarily invests in logistics and fulfillment centers to create better traffic and reduce Amazon’s costs to improve delivery systems. I explored Amazon’s logistics section on this note last fall. In 2020 and 2021, Amazon spent $ 80B to upgrade Amazon logistics, more than in the previous five years.

Amazon continues to develop its logistics and fulfillment businesses, thus gaining the quantity needed to enable the best customer experience such as one-day delivery, while Amazon improves its delivery strategy.

Amazon is improving its distribution strategy for merchants selling on Amazon, but now with the introduction of Buy With Prime, Amazon will offer its logistics and complementary infrastructure to third-party merchants. Benefits of being distributed as a Prime product on the Amazon website.

Amazon: The King Of ECommerce

In this note, we will further explore why buying in Prime is so important from the point of view of merchants and end customers. Amazon’s investments in the fulfillment and logistics divisions have allowed it to build infrastructure and develop mechanisms to provide these services to third-party businesses, which will allow Amazon to launch new value-added services on the same day following its customer experience. Distribution. As Amazon expands its services to third parties, the network effects of Amazon will be strengthened as it will better serve its customers and reach the economy. This is exactly what Amazon is trying to do to reshape consumer expectations.

“Your margin gives me a chance.” – Jeff Bezos

Amazon is looking to convert online checkout outside of Amazon by offering Amazon Pay with Amazon Prime in online POS. In previous posts, I shared my research for Amazon One, Amazon’s offline payment terminal, and my detailed study for Amazon in order to provide an attractive digital wallet for merchants and consumers.

Like AWS, Amazon Video, and Kindle, Amazon is focused on adding to its long list of digital wallets, Amazon Pay, and profit centers. Amazon is known for its ability to capture customers and their wallets. The customer goes to the checkout page. Amazon captures a lot of data and uses it to better understand its customers and improve its performance at a lower cost. Amazon Bay will help embed a large amount of data collected while promoting Amazon’s core services, offering more competitive pricing, more attractive financial products to consumers, and more. “- Author Amazon Fintech Note

Amazon is now strengthening its trenches by offering its distribution services to third parties, while at the same time providing businesses with the best way to make payments, branding their products as prime products. This allows non-Amazon merchants who use Amazon’s logistics and FBA to further improve its distribution systems locally. When it comes to Amazon’s logistics and fulfillment divisions, it helps to increase the return on investment, especially as Amazon offers payment methods to further control its customers’ delivery patterns and improve its cost structure. Create more and better customer experiences.

Amazon: The King Of ECommerce

Buy in Prime: For merchants

For merchants who already use the FPA, Buy With Prime can be added to their online store in minutes, as their inventory is already stored at Amazon Filling Centers. To get started, merchants can sign up for Buy with Prime, link their Amazon Seller Central account, use the Multi-Channel Fulfillment to deliver inventory for multiple channels, and connect the Amazon Pay account to provide a seamless checkout experience for Prime members. Then, by installing the JavaScript widget in their online store, merchants can easily add Buy with Prime to one or more products. By purchasing Prime, merchants will receive shopper order information, including email addresses for customer orders, which they can use to provide customer service and build direct relationships with shoppers. “- Press Release: Amazon Publishes

Amazon will provide merchants and businesses with the ability to deliver Prime shopping experiences and Prime benefits to their customers from their own direct-consumer websites. This allows merchants to be in control of their customer experience, while Amazon allows its merchants to develop brand loyalty while providing a quick, free delivery to Prime members to make more changes to brands. Registered fees and address information linked to one’s Amazon account are used and shared with independent merchants through their store’s website. Merchants will pay for this service based on the utility fee, which will encourage merchants to sell on the platform as their fees will be related to the revenue generated by the services and measured over time.

Using the purchase with Prime, merchants pay for what they use. Pricing is based on the service charge, payment processing fee and completion and savings charges calculated per unit. It does not require a fixed subscription fee or a long-term contract, and merchants can expand or cancel the option at any time. “- Press Release: Amazon Buy with Prime

Buy Prime with the uninterrupted check-out experience that customers expect from Amazon from third-party merchants, while giving merchants access to Amazon’s logistics and catering network. This will be very useful for merchants as it offers an attractive one click check out with the benefits of Amazon Prime. As Amazon wants to distribute its one-click checkout and its logistics and finishing infrastructure to merchants, purchases through Prime will be offered by e-service providers, including Big Commerce.

Buying on Prime refers to the mandatory value addition for BigCommerce merchants who want to increase their sales and enhance the omniscience experience they provide to their customers. Prime sets customers’ trusted shopping experience, including convenient and fast shipping … Extending these benefits to our merchants will enhance their online shopping experience, enhance brand loyalty, and grow and scale. “Press Release: Amazon Unveils Buy Prime

With the widespread release that Amazon will be following later this year, Amazon is releasing a purchase with Prime for Fulfillment Buy Amazon (FPA) merchants.

Buy with Prime: For consumers

Purchasing through Prime will allow millions of Prime members across the United States to shop directly from merchants’ online stores with the trusted experience they expect from Amazon – including fast, free delivery, unrestricted check-out experience and free revenue on eligible orders. Prime members will see the Prime logo and delivery promise of eligible products in merchants’ online stores, indicating that the item will be available for free delivery the next day, with a quick, free return. When shopping with Buy with Prime, checking out is simple and convenient. Prime members will use the money and shipping information stored in their Amazon account and receive timely shipping and delivery notifications after ordering.

When Prime members receive the benefits of Prime outside of Amazon, when they see the Prime logo next to an item, they are more likely to spend outside of Amazon, especially the payment methods they have stored on Amazon will be an option when choosing to purchase through Prime. . This further strengthens the benefits of being an Amazon Prime member while creating strong network effects.

  • More consumers will join Prime if they can get the benefits of Prime outside of Amazon.
  • More merchants will look to sell Prime Products as more consumers are on the platform.

Essentially, Amazon has mastered the idea of ​​integrating demand on its platform and attracting suppliers to its site to meet demand. This creates strong trenches for Amazon, especially as it makes it easier for Amazon to pay its customers through Amazon Pay. Amazon is creating a payment gateway that combines credit cards and new digital wallets or traditional payment methods such as Venmo (PYPL) or AFRM (AFRM).

We always aim to exceed the expectations of Prime members by offering additional selection, exclusive deals, quality content and convenient features. With the introduction of Buy with Prime, we’re expanding the space for members to enjoy reliable and convenient Prime shopping benefits beyond Amazon, and add even more value to their members. “- Jamil Connie, Amazon Prime VP

Amazon + sure

Last summer, Amazon announced a partnership with Affirm, which confirmed Amazon’s exclusive BNPL provider in the United States until January 2023. Buy with Prime is a significant development for Affirm because Affirm is a payment option that can be linked to one’s Amazon account. Payment option for Prime purchase and payment method embedded in Amazon Pay.

When Amazon Buy With Prime comes out, Affirm’s software-defined, data-protected, vertically integrated network will enable Amazon to increase conversions on third-party checkout pages, as Affirm’s network includes SKUs (Stock Deposit Units) using Affirm’s payment method via Buy with Prime. If someone chooses to buy, Amazon can use it to use data from consumers to notify the required parties (i.e., a third-party dealer or product manufacturer) within its network. Because Affirm operates on the SKU-based network, Amazon uses the entire process of completing data from merchants and their customers, especially as Affirm protects transaction data during sales so that it can be reported and understood across multiple networks (charges). Logistics, and fulfillment) ultimately improve Amazon cost structure to enable better customer experiences.

If you compare existing payment networks [confirm], one of the biggest missed opportunities, if you will, is that they do not protect most of the transaction data when the transactions move on the system. So the whole of all networks and of course the payment networks is all about sending messages, which is a tragedy and a huge opportunity that does not stick to data transactions while moving on the computer, and it extends beyond the point of sale. The way to finance things like production and logistics, all the way to rewards. The data is disconnected and then guessed or completely discarded.

So, the idea for Affirm has always been this idea that connects all the financial points, the idea that consumers form in their head by protecting the data from the beginning, to the peak of the transaction when the money changes hands. And all means of execution and should be such as a dispute or repayment cycle. “- Max Levich, CEO confirms.

Subsidizing 0% loans also encourages new parties to subsidize transactions such as a merchant’s product manufacturer to encourage transactions in specific SKUs, enabling merchants to enable higher transactions and higher exchange rates at the point of sale. Amazon can subsidize BNPL loans on a specific SKU or provide targeted ads that generate valuable data for future advertising campaigns by using Buy with Prime through Amazon to subsidize 0% loans to third party merchants to sell more products.

Affirm’s management maintains a long roadmap with Amazon. Below is what Affirm’s Chief Financial Officer said about its partnership with Amazon at the Bank of America’s Electronic Payments Symposium last month.

At Amazon, I think you should not expect a big explosion, but it should come in the form of patience – we do the program. We will continue to grow and expand it. Also it will be a source of growth for quarters and years as the project is not near its optimum level. It does not have this kind of flash-bang approach that you can find in other businesses or corporate partnerships.


The post Amazon: The King Of ECommerce appeared first on India Express Online.

Source: Around the Globe

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