Amazon (NASDAQ: AMZN) recently opened its delivery services to other third-party online merchants for home deliveries to consumers. This new service, known as "Buy with Prime," permits other merchants to utilize Amazon order and shipping services on their own websites.
Though sellers will have to pay a fee in order to run Buy with Prime, costs will depend on factors such as payment processing, fulfillment, storage, and so on.
On merchants' websites, Prime badges can be placed near products that are eligible for free shipping. Members of Amazon Prime will be able to utilize payment and shipping data that is kept on their Amazon accounts to make the process more convenient when they are placing orders.
"With the introduction of Buy with Prime, we're expanding where members can enjoy trusted and convenient Prime shopping benefits beyond Amazon, adding even more value to their membership," said Jamil Ghani, vice president of Amazon Prime, in a press release. "Members will have the flexibility to shop from merchants directly, all while enjoying the fast, free delivery, seamless checkout, and easy returns they've come to know and love from Amazon."
According to Amazon, Buy with Prime will come out sometime this year and will begin with sellers that are part of their Fulfillment by Amazon service. In time, they will become more open to sellers who do not utilize Amazon Fulfillment services. With their FBA (Fulfillment by Amazon) service, sellers are required to place their products in Amazon's warehouses. They also will need to utilize Amazon's supply chain and shipping services.
Amazon has revealed that they anticipate to soon become the biggest delivery service in the United States, according to CNBC. This means that the company will be competing against shipping services such as FedEx (NYSE: FDX) and UPS (NYSE: UPS). And, although the Buy with Prime service is expected to be small in size at its outset, with time, it could very well change into a renowned business for Amazon, according to Bob O' Donnell, founder and chief analyst at Technalysis Research, CNBC reports.