• Shopify, Deliverr, and Amazon

    By ZonSupport | Posted on March 10, 2023| Blog

    Maybe Deliverr is the matchmaker between Shopify and Amazon.

    Shopify’s acquisition of Deliverr last year was the start of this ecom giant recognizing that speed of delivery is what generations of Americans have been brought up with – indeed expect.

    They are now invigorating their Shopify Fulfillment Network (SFN) which almost goes head-to-head with Amazon’s new Buy With Prime (BWP) offering.

    We follow So Stocked blogs with great interest as they are a leading thought leader on inventory management. Some of the content below is sourced from their recent blog on this topic. Here’s our view on the likely impact on Shopify Sellers and importantly, another reason to consider this platform.

    Buy With Prime (BWP) is an Amazon Fulfillment program that allows merchants to offer 1 to 2-day shipping, free delivery, and free returns on their own websites outside of Amazon.com.

    However, checkout must be done via Amazon Pay, which requires the customer to create or log into their Prime account to complete their transaction. This process could allow Amazon to see the Shopify customer’s name, address, and contact details (for shipping purposes). They could then use this data to launch remarketing and retargeting campaigns to that customer.

    However, this has zero impact on Sellers owning their own customer data which most cite as their #1 objective of selling on other platforms. This also enables Sellers to grow an independent sales channel out of the clutches of Amazon’s bots running rampant and suspending them!  Objective # 2.

     While this has the potential to enrich Amazon’s database of product purchasers, they may well know of them anyway!  

    The broader rollout of the Shopify Fulfillment Network (SFN) happened at a time when the company’s Q4 022 shares fell nearly 7% and revenue growth slowed amid escalating Amazon rivalry, indicating a rough time ahead. That might explain why Shopify is looking for a partnership with Amazon instead of competition, a business strategy called “Co-Opetition.” 🤔

    Welcoming its rival into the fold might help the company reduce competitive intensity levels while expanding its customer reach with Prime, which currently has over 200 million members worldwide.

    The same goes for Amazon.  A collaboration presents an opportunity to tap into the rival’s customer base while keeping them at an arm’s length. This also helps Amazon maintain its lead over Walmart.

    The risk, however, is potentially greater for Shopify as it stands to loosen its grip on seller’s customer data. Additionally, BWP could eat into its profits. The Canadian eComm giant generates most of its revenue through transaction fees. 

    This is the reason analysts recommend not allowing Amazon to take over the checkout. Whatever the outcome of all this positioning between these e-commerce platform competitors, it does not affect Shopify Sellers. That said, there may be a difference in transaction fees but this is far outweighed by the advantage of faster shipping through a trusted (Prime) network.

    If no deal is taken, Shopify might have to find other companies that can take Amazon’s place in solving this challenge for them. Fulfillment has always been their perceived weakness against Amazon buyers “must have it right now” mindset.

    Recent moves suggest that Shopify is not backing down in its fight for market share. It has teamed up with Flexport to expand its fulfillment capabilities globally and compete with Amazon Global Logistics.

    Meanwhile, Amazon continues to beef up Buy with Prime by making it available to US merchants that use BigCommerce. The Texas-based shopping site builder launched an app that allows sellers to easily enable BWP features on their stores with no coding required.

    So how do sellers benefit? Quite simply, Amazon has created generations of consumers who have an appetite for buy-now-have-now. It’s their point of difference – buying with Amazon equals almost instant gratification! Anything Shopify can do to speed up delivery closes the gap.

    As Shopify works its way around serving customers faster, Sellers have a stronger likelihood of finding success on Shopify. We see this as another driver for Amazon Sellers to broaden their ecommerce platform horizon and chase the opportunity to own their customer’s data.

    As always, ask us anything. If we don’t know the answer, we’ll know someone who does!

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