Amazon’s ‘Buy With Prime’ Was The Real Winner On Fall Prime Day Event

Brands are now counting up the dollars they made during Amazon’s
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Big Deal Days event earlier this week – and comparing it to what they spent on ads and promotions.

Overall, the event has been a success. Marketplace software company CommerceIQ tracked a 4.5X increase in orders, compared to the daily average. And Amazon confirmed that this year’s event was larger than its equivalent fall event in 2022.

While this pleasing sales outcome was largely driven by the usual on-site discounts and promotions, some brands opted for a diversion from their standard Prime Day playbook: Buy With Prime. This is a checkout feature that brands can enable on their own DTC site, enabling shoppers to see Amazon product reviews and use their Amazon account to make the purchase, track it, and manage returns.

I personally was served a much larger number of promotions on a brand’s DTC site using Buy With Prime, compared to prior Prime events.

Take the brand iHealth, for example. Last year their email campaign for the Prime Early Access Sale (the Prime event held at the same time as this year’s event) led to their Amazon.com product pages. This year, the company promoted both their Amazon store deals and Buy With Prime deals.

Still, many brands feel the need to educate their customers on how to actually use the Buy With Prime program, as it is fairly new.

Amazon introduced this program in April 2022, and adoption of the program has ramped up as more brand- and customer-friendly features have come online. Initial feedback from some shoppers was that the buying process was cumbersome, and didn’t allow them to build out their cart in an intuitive way. Amazon has worked through many of the kinks in its early iteration, and the company provides robust support to brands looking to enable the feature on their site. Many brands have jumped on board as a result.

Whether a customer buys on a DTC site using Buy With Prime, or on the Amazon.com store, Amazon wins. Amazon charges fees on each order, and participating in the program requires brands to use Amazon’s fulfillment network – further entrenching brands into the ecosystem. But there are also benefits to the brand for leveraging this program.

The most compelling is that Amazon claims that merchants who join “Buy with Prime” increase shopper conversion by an average of 25%. Customers may be reluctant to purchase from an unknown retailer, for various reasons. By affiliating with Amazon, retail websites can address any trust issues a customer may have.

Another key benefit is that merchants can syndicate the ratings and reviews from their product listings on Amazon.com, and display them on their site. This also improves trust and credibility with shoppers.

And finally, merchants get a little bit more data about the customers who purchased from them, compared to Amazon at least. The customer name and mailing address is supplied to the merchant.

What is made less clear to merchants, is whether a brand’s position on Amazon.com is affected by their Buy With Prime orders. In response to the question of how the program affects a merchant’s Amazon business, Amazon’s FAQs only state that “Buy with Prime is designed as a complementary offering to your existing Amazon.com business. By adding Buy with Prime to your e-commerce site, you can offer Prime shopping benefits to Prime members in more places.”

So the brands who chose to promote their Buy With Prime deals, rather than promoting their deals directly on Amazon, would have missed out on a key part of the Amazon flywheel: sales velocity on the Amazon store. Sales velocity, relative to competitors, is a key part of the Amazon search ranking system. All other factors being equal, a product that sells 100 units per day will rank higher than a competing product that sells 50 units per day.

It is not necessarily a binary choice for brands to make – promote Buy With Prime at the expense of promoting their products on the Amazon store. After all, the past decade in e-commerce has taught us that channel cannibalization is less of a concern than many brands think. Customers are going to transact in the channel that is most convenient for them. So brands can and should offer a variety of ways for customers to discover and purchase their products.

If Amazon were forced to choose, the company would probably rather the sales occur on its site, where it can collect more user behavior data and monetize traffic through ad revenue. But at the end of the day, Buy With Prime allows Amazon to win everywhere.