If you’ve recently shopped at cosmetics brand Laura Mercier’s website, you may have come across a blue-colored teeth whitening strip shaped icon right below the “Add to bag” box, which offers a free and fast delivery date to shoppers. The blue box is Amazon’s Buy with Prime button plugged into Laura Mercier’s DTC site.
This year, Amazon is making a compelling play to push its Buy with Prime checkout feature first released in April 2022. This spring, sneaker brand Adidas will also carry a Buy with Prime badge on its app and website. At checkout, shoppers will get an option to log into their Amazon account and verify their Prime membership to complete the purchase. For a company that sparingly shares internal data, Amazon said in January 2023 that Buy with Prime led to a 25% increase in shopper conversions on average for merchants.
High-level buzz among Amazon experts is that the tech giant is sweetening the deal to get high-quality brands to sign up for Buy with Prime. This is because Amazon wants to expand its dominance over the supply chain. DTC shipping times tend to be much slower so brands are willing to test out this feature. Buy with Prime allows Amazon to control the online stores of thousands of brands by managing the fulfillment, delivery, and returns of items at a faster clip.
The momentum to push its own checkout tool also comes at a time when President Donald Trump is trying to influence global supply chains with a trade war expected to set off this month.
“I think [Amazon has] struggled to get it off the ground,” Ryan Craver, founder of commerce agency Commerce Canal, told Retail Brew. “However, I also think they’ve put forth a good effort.”
When he saw the Amazon-Adidas update, Craver said, he knew Amazon was pushing Buy with Prime aggressively. “I’ve had several conversations with people about what type of incentives [Amazon] could potentially give us to gain Buy with Prime sign-ups,” he said.
Amazon wants more control overall, Craver said: “This is an extension of Amazon outside of Amazon into the DTC world…and a further way for them to own more of the supply chain.”
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“If you think about using Amazon as your warehouse and your 3PL to fulfill everything—whether it be Amazon orders, your dot-com orders, T.J. Maxx orders, other retailer orders—they have so much more of a hold on you, and they’re so much more sticky to you,” Craver added.
Sky Canaves, eMarketer principal analyst for retail and e-commerce, had a different take. She said the push toward Buy with Prime was a way for Amazon to differentiate itself from rival Temu. This way it can attract more premium brands to its ecosystem and make them pay for FBA.
“Then if it loses some of its Chinese sellers to Temu, maybe that impact is much smaller, and it also allows [Amazon] to leverage its strengths, so it creates more revenue opportunities for Amazon from these premium brands,” she said.
How does the math work: The push to expand Buy with Prime further comes after Amazon became the largest delivery carrier in the US in 2023. Therefore, it can offer cheaper shipping rates compared to rivals UPS and FedEx.
Among Craver’s clients, Buy with Prime ends up saving merchants 16% in costs compared to conventional fulfillment and shipping expenses. Amazon’s checkout tool also gives brands access to its “rabid” Prime customer base, he added.
The flipside to looping in Buy with Prime is that brands lose out on a direct relationship with their customers. “The risk is that the customer checks out indirectly with you,” Craver said. “You lose out on that one-on-one connection.” However, since Buy with Prime can potentially cut down cost of shipping, brands seem willing to overlook that.
Put together, Craver said, Amazon is hoping to go down the same path as Apple Pay—once rare but now ubiquitous: “It’s like back in the day when Apple Pay wasn’t available, and now Apple Pay is available everywhere…I find myself using Apple Pay on everything.”