Amazon Buy with Prime - Merchant Guide¶
Source: https://www.wte.net/Blog/February-2023/Amazon-Buy-with-Prime-Merchant-Guide
Date: February 2023
Author: Martin W Smith
Introduction¶
The author shares his experience building FoundObjects.com in 1999, one of the first specialty gift B2C and B2B online stores. He notes that small-to-medium ecommerce merchants face challenges from Amazon and Google's control over pricing, shipping standards, and organic search traffic.
Amazon's new Buy with Prime program represents a significant shift in ecommerce strategy. Rather than relying solely on traditional fulfillment centers, Amazon has adopted a crowdsourcing model allowing direct-to-consumer brands and third-party sellers to leverage their own shipping infrastructure alongside Amazon's network.
Resolving Amazon's Ogre Issues¶
The Core Problem¶
Direct-to-consumer brands and third-party resellers fear Amazon for two reasons: brand protection and customer data ownership. Amazon's marketplace prioritizes products and pricing over brand building, and the platform's scale can destroy brands through cheaper competition.
Brand Protection Benefits¶
Buy with Prime leverages Amazon's impressive fulfillment technology, including same-day shipping capabilities, easy returns, and package theft notifications. This infrastructure becomes accessible to sellers who qualify.
Seller Fulfilled Prime Requirements¶
To participate, sellers must meet stringent criteria including: - Premium shipping options - 99%+ on-time delivery rate - Less than 0.5% cancellation rate - Use Amazon Buy Shipping Services for 99%+ of orders - Nationwide delivery coverage - Weekend delivery and pickup support - 1-2 day delivery capabilities - Amazon Easy Returns Policy compliance - Allow Amazon to handle customer service inquiries
Customer Ownership Advantage¶
When sellers qualify for Seller Fulfilled Prime, they can advertise on Amazon marketplace, driving traffic to their independent sites. Amazon research showed a 25% shopper conversion increase—a significant metric when calculating lifetime value and revenue growth.
The author illustrates this with a mathematical example: converting 4 of 100 visitors at $100 average order value equals $400 per 100 visitors. A 25% conversion bump increases this to $500 per 100 visitors, scaling to $500,000 revenue per 100,000 visitors versus $400,000.
How Buy with Prime Works¶
Once approved, sellers can display the Prime badge and offer Prime benefits to the platform's 150+ million North American members. Seller Fulfilled Prime isn't free—service fees likely exceed 20%—but customer acquisition costs are standard in ecommerce.
When Amazon Prime members click the "Buy with Prime" logo, they're directed to Amazon's payment cart where their membership is verified. The author acknowledges this "two shopping cart" approach is problematic but offers strategies to mitigate the issue.
Buy with Prime Strategy¶
Apply Pareto's 80/20 Rule¶
The author recommends using Buy with Prime sparingly on your highest-performing "core products" (20% generating 80% of profits). Instead, target the "long tail"—lower-performing products that attract initial purchases from new customers.
Good Buy with Prime candidates should: - Be solid but not exceptional sellers - Have sufficient inventory to meet SFP guidelines - Enable quick inventory replenishment - Auto-remove buy buttons when out of stock - Be profitable enough to absorb BwP costs - Generate satisfied customers with low return rates
Store Within a Store Approach¶
Create a dedicated Buy with Prime category to test this concept separately from your primary store. This separation allows you to: - Track abandonment rates - Monitor when customers use both carts - Create targeted merchandising strategies - Analyze Prime customer behavior patterns
The strategy aims to gather data about whether Prime customers will open additional shopping carts for desired products, informing future merchandising decisions.
Back to the Future: Platform Selection¶
When deciding between platforms (Shopify, BigCommerce, Wix, WordPress, SquareSpace), consider: - Branding: Is your brand established or new? - Scale: Where will your store be in 2-5 years? - Team: Does your team possess digital marketing and SEO expertise? - Backing: Are you bootstrapping or using outside funding? - Exit Strategy: Is this a lifestyle business or a sale candidate?
The author cautions against platform hype, noting most implementations cost 2-3 times advertised rates due to widgets and customization needs. He advocates for partnering with experienced technical leaders (like a CTO) who understand both technology and marketing rather than relying solely on "drag and drop" platforms.
He illustrates this through a cautionary tale: his FoundObjects.com initially ranked highly in Google for "cool stores" using static HTML tables. When converted to dynamic database-generated pages for easier maintenance, the site lost its search rankings due to poor SEO implementation—a "do no harm" principle he advocates preserving.
Simply Gum Buy with Prime Example¶
The author provides a practical implementation example using SimplyGum.com:
Step 1: Create a Dedicated Category Add a visible "Buy with Prime" category to your site navigation.
Step 2: Distinctive Merchandising Design unique product combinations and messaging for Buy with Prime offerings, targeting new-to-file customers rather than cannibalizing loyal existing customers.
Step 3: Order Fulfillment Customer data flows to your site, enabling you to build email lists and include marketing materials in shipments.
Subscription and Gamification Strategy¶
The author recommends offering subscription options with tiered benefits (Bronze, Gold, weekly options) and gamified rewards. Include subscription cards in initial orders and follow with time-limited special offers.
Key marketing benefits to highlight: - Time-saving convenience - Prevents product stockouts - Cost savings - Exclusive access (early flavor releases, feedback opportunities) - Fun/community engagement
This subscription approach increases customer lifetime value to offset higher acquisition costs from Buy with Prime.
Resources¶
The author includes a historical photo of FoundObjects.com from 1999, noting the site launched that November and generated $30,000 in first Christmas sales. The store featured specialty items like Magnetic Poetry Kits and Zen Boards before the domain was sold.