The E-commerce Leader

[00:00:00] Jason: it’s important for every Shopify seller to ask themselves, what advantage does this bring to you? And one of the advantages could be speed.
[00:00:06]
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[00:01:01] Michael: Ladles and jellyspoons, welcome back to the hot takes. Our last hot takes episode in the current format on the call in show and also on Spotify and wherever it is near you for the eCommerce theater today, we are talking with our usual panel of Chris Green Kyle Hamer, Jason Miles, over in the United States of America.
[00:01:20] I’m over in Britain and we’re talking. Buy with prime today, Shopify and Amazon integrating playing nice. Or are they, this is gonna be part of the discussion today. Let’s get into this and have a chat about this. So who wants to kick off first?
[00:01:34] Kyle: Yeah, I’ll jump into it, but I think it’s great to set the table with a little bit of context, what this program is and whether or not you should be excited or fearful.
[00:01:43] I think that’ll be the the big question, but essentially. Buy with prime. In my opinion, is an extension of sort of the Amazon pay concept where in the past on Shopify or any eCommerce platform you could in fact use a little pay, Amazon pay checkout, use the Amazon checkout component. And it’s all tied into seller central.
[00:02:04] So with this it’s interesting because now what they’re gonna. With this program, which is invite only. So it’s not, it’s still in beta, so it’s invite only. But what you are able to do is actually get prime benefits extended to your website, to your customers, meaning that you get all of the same shipping free shipping components for well free to the client, right?
[00:02:28] It’s free to the customer, not free to. But you get that you get the returns policy and all of the prime benefits that Amazon takes and associates, and now transfer to your website, to your users. And you still own the data it’s still on your store. Now a couple of caveats to that is this there’s three things that you need in order to be available or have the opportunity to have this program take place one.
[00:02:50] You have to have a professional seller account for Amazon. You do need to be using FBA. You don’t have to be selling on the platform, but you have to be using them for fulfillment. So there’s that piece of it, so Amazon’s gonna be making their money on that. And then you have to have Amazon pay set up on your store.
[00:03:08] So those are the three sort of components for it. So why would Amazon do this? I think is in my opinion, it’s they see the writing on the wall in terms of competition out there for For just with Shopify, with these other distributed e-commerce. And I think as Shopify’s trying to work hard to bring some cohesion to all of their different units and all their different websites, I think that Amazon sees that as a a competitor to them.
[00:03:33] I think the other way that this makes sense for Amazon is it’s an easy way to start talking about additional benefits to prime without any cost, really, to them. Like they can now go to their prime members and say, now you have access to all these other really cool websites that want to use this really.
[00:03:47] You can go buy with if you didn’t wanna buy directly with Amazon. So if there’s brand affinity, I think it’s an easy extension, easy sell to the prime benefit or to the prime members for Amazon as well. So the real question is as a brand owner, are you really gonna be interested in this and what would be the benefit to you as a brand owner?
[00:04:06] So yeah let’s kick it around.
[00:04:09] Michael: Excellent. One other thought I’ve got is why Amazon might be doing this is I believe Amazon now has excess capacity had far too little under lockdowns for a long time. And everyone in the Amazon seller community, if that’s a thing, so people who primarily will only sell on Amazon were very fearful of getting their internet.
[00:04:24] The IPI, what do you call it? The inventory performance index dinged and not being able to ship in products to Amazon. It was a bit of a nightmare for many of us many Q4 S in a row, but actually we’re now in the opposite, which is almost unknown to us as Amazon sellers. So I think that may be another reason why they’re doing this is just to make use of the capacity that they’ve built and try and monetize it.
[00:04:43] But you’re right. The primary question is gotta be, should we be doing this if you’re selling on your own website? So guys Chris and Jason, what are your thoughts?
[00:04:51] Jason: I’ll jump in. Yeah. , I think it’s an intriguing question. Why should you do this if you’re a seller? The number one thing that you’re focused on is a seller is conversion rate.
[00:05:00] When you have people on your site and the question would be, does this help and the conversion rate metrics they, I’ve seen statistics that say adding Amazon, pay like just, just that level of it. benefits your site, something like 17 percentage points on your conversion metrics.
[00:05:18] So I, is it a useful thing in the mind of the customer to check out and to say, oh, this is oh I understand what’s happening here. This, I can I like Amazon pay. And then on the back end, does it help you more elegantly fulfill, my question that I don’t under, I don’t know is Kyle in terms of the integration with fulfillment on the fulfillment side for an order.
[00:05:40] Pops into your Shopify dashboard. Is it create an elegant path there? Is there any difference in how you currently, like you do this on Lea you, you fulfill with a couple taps of your, on your phone from FBA through your Shopify, orders that come in, is it mixed? Does it mix does it improve that experience or change anything in that.
[00:06:01] Yeah,
[00:06:02] Kyle: that I’m not sure about. I do think it would probably as simple, , as creating a multi-channel fulfillment order, which is essentially what you would be doing with it. So I don’t think there’d be any sort of change fundamentally with it. The other thing that does happen, which is really interesting for, the brand owner or the website owner specifically, is that it adds the prime badge to the products that you submit for the program.
[00:06:26] So now on your website, on the product page, it’s prime, it’s just like you would on Amazon. See the prime eligible badge. So that’s interesting from a conversion rate standpoint.
[00:06:35] Jason: Yeah, no doubt. Yeah.
[00:06:40] Kyle: One of the other things too, that I think is a challenge or has been a challenge for many like website owners.
[00:06:48] And especially if they sell on both Amazon and their own website is getting those prime customers to convert actually on their store because there’s no real incentive for the prime customer. To shop on your website. There’s literally, you can engineer, there are some tactics, right?
[00:07:07] There’s some V I P programs. And there’s some things that you incentivize, but in many cases, it’s not a strong enough incentive to pull people away from Amazon to make that purchase. If you’re on both, I think this actually makes that potentially more easier to do because now they get all the same benefits of prime.
[00:07:24] Plus any additional benefits that you want to layer on from a V I P program or points program or any of that kind of stuff. So I think it’s really interesting. Yeah.
[00:07:33] Michael: Yeah. That sounds very powerful to me. Chris, what are your thoughts on this?
[00:07:37] Chris: I think everyone here and everyone out there is sleeping on this program because it’s way better, in my opinion, of course, better, more influential.
[00:07:46] Way too many, so many benefits, incredible amounts of pros to minimal. If any amounts of cons it’s something that’s been around. They used to call it prime on your site. This is like probably at least 10 years ago. And it was like Cal said, like a kind of integration of multichannel fulfillment. I don’t know if they treat multichannel fulfillment orders, the exact same as a retail order at Amazon, I’d have to believe.
[00:08:06] At least a little second tier compared to an Amazon retail order for a prime customer. But the thing that people need to remember about prime, it’s not about being loyal to Amazon or loving prime. You can hate Amazon and hate prime and love prime benefits because you get your stuff vast. I got something on a Sunday that I ordered at four 30 in the afternoon and said, if you order in the next 45 minutes, it’ll be at your house before seven 30.
[00:08:27] Yeah. I’m buying it. I’m not going somewhere else. I’m not going to a website. We’ve gotta create an account and make a login and pay shipping in a might ship tomorrow. That’s what, to me, that’s what prime is all about. So being able to extend those benefits that the customer sees and understand says yeah, I want that.
[00:08:43] I know I can get it fast. It’s gonna ha I don’t know. It’s gonna have the, oh, you order in the next three hours kind of thing on a website. I doubt that would be at the launch. But that could come in. That’s gonna incentivize conversions. It’s gonna give people a reason to buy on your site.
[00:08:55] Like I said, why would somebody buy on somebody else’s site when I can just go to. Then get same product, get it faster. I think one click, I’m just done. I think, and I don’t know if you guys saw this. But Shopify bought deliver, deliver were like two RS at the end. I didn’t know how big they were.
[00:09:08] They’re $2 billion company. So now you got Shopify with deliver integration and fulfillment and Amazon’s wait a minute, wait a. You can buy from Amazon retail, or you can go to the third party website where they have Shopify great checkout experience. And now they got, fulfillment integration.
[00:09:22] Wait a minute. No. We don’t want two pies. We wanna get a little piece yeah. Of that. But we wanna still be involved in third party plus buy with prime instead of like it’s either on Amazon as a seller central account or not. Yeah. So I think it’s a smart move by Amazon to do that. And I think it’s a, the risk I see is, well before the.
[00:09:41] The other benefit that I think people are sleeping on is that we get the customer. We don’t get that as a seller. Currently we get this customer data. Cause that’s the risk I wanna bring up just to scare everybody is Amazon two years from not gonna change and be like, yeah, by the way, we’re not gonna give you customer data anymore possible.
[00:09:57] I really don’t think that’s their motive, but it’s possible, you’re in play the sandbox. You gotta
[00:10:01] Jason: play by the rules. It flows through the order structure and Shopify. So it’s your, they have to check out through your site, right? They could check out as a guest I suppose, and use it well.
[00:10:10] I’m talking in the Shopify context. Yeah. Yeah, but those, I think those are interesting points. The deliver thing we need to sell for a whole different podcast, cuz I think that’s a really interesting topic in and of itself with a lot of nuance. I think I’ll just make one comment about the who is this best for then people might be listening to this who are retail arbitrages or who do different forms of Amazon selling and they always poke around and Shopify as an idea.
[00:10:35] And I would just say that the Shopify sites that we’ve seen be most successful and think on new to me and with our one-on-one consulting work and all of that, we’ve worked with close to 40,000 Shopify sellers. Now the ones that we see be successful. Are a focused niche product strategy. And so you’re not gonna make a Jack of all trades Shopify site and ever make any sense out of it.
[00:11:01] It, where it’s like a five and dime store. So the opportunity really for this is to. As a logical extension of somebody who’s got a brand, a private label or otherwise, and they really have focused on who their ideal customer is, and they know how to get them to the site and then they know how to convert them.
[00:11:21] And the conversion piece, I think, is the most juicy bit of this. But I think that’s who this is probably ideal for. If you’re a retailer arbitrage or doing garage sailing or something like that, online arbitrage and using. This isn’t the step for you until you get a focus. Now, if you’re all in the garden category and all you do is sort garden, category items, then maybe you’re talking or, whatever it might be new in the box automotive parts or whatever.
[00:11:48] You, you have to have a niche or a specific topic, I think, to make sense out of this. Anyway, that’s just my commentary in terms of who it might be. So
[00:11:57] Michael: just a quick commentary on the fears slash risk side. I think it probably depends which market you’re in and what perception you have of, the smaller websites fighting the giant Goliath that is Amazon.
[00:12:07] But one thing that’s obvious to me is that Amazon’s cannibalizing your sales anyway. So even. You have a certain residual fear or resentment against Amazon. I think if it makes it more possible to get a present of the sales on your website, I would do everything in favor of that unto Chris’s point. I think prime is so powerful, so trusted and we’ll generally have personal experience of it.
[00:12:30] And so do the consumers who come to our site. That I think it’s definitely worth exploring. Whether it’s gonna be risk, I don’t know, an non Shopify specialist or a DTTC guy, but I can’t help feeling that if we don’t do this, then the clicks that go to our website are gonna get wasted. The conversion rate isn’t boosted enough, and most of them will find their way back onto.
[00:12:48] Google and then onto Amazon anyway. So I think Amazon’s gonna be taking our sales one way or the other. I’d rather have Amazon take a piece of the pie at the back end of the process, to your point. Jason, keep the customer data for me. That’s the number one frustration of selling on Amazon and a deep risking factor of having your own list.
[00:13:06] So I, I don’t see much downside. Maybe we should talk about this specifically, Chris, it sounded like you were gonna say some sort of downside thoughts that you had. What are your thoughts on that?
[00:13:16] Kyle: Oh, that was just could be the
[00:13:17] Chris: risk, right? The risk of Amazon changing, the sure. Outline of the program kind of thing, and like you just said like you’re worried about people don’t wanna be too reliant on Amazon.
[00:13:27] Are they gonna be in the beginning of the transaction, the end? And I just don’t want people to go out down the road of. No, I need to be completely independent of Amazon. Like you can think that, I guess I don’t see Amazon as like this bully. I see Amazon as providing a ton of value to the customer through selection and speed and all of these other things that we.
[00:13:44] In my opinion, thankfully get to take advantage of so I wanna look at them as a partner, a strategic partner, a partner they’re like, Hey, you know what? I might change the rules of our relationship here, but not a no. We have to be able to do this business without Shopify, without Amazon.
[00:13:57] I’m gonna ship all my own stuff. But I think people are missing the forest for the trees. Is that the right use of that phrase? , going little too crazy on it.
[00:14:09] You can hate Amazon. I know people who like hate Facebook and I’m like, you can hate Facebook
[00:14:13] Kyle: and there’s people that definitely. Yeah. There’s people that hate Amazon. Here’s the other piece of it, where I think this gets a little bit tricky for folks. If you were running a Shopify store or your website and your products don’t lend itself well to a cost effective FBA.
[00:14:29] So you might have a big product. It might be way too expensive for you to ship by FBA. Then this program would be nice to have, but it might be difficult to implement, right? Because you have to be using Amazon’s fulfillment. To actually take advantage of it. So I think there’s a little bit of nuance there for certain folks, but I don’t think the downside risk is that you get it started and Amazon gets rid of it.
[00:14:50] It’s it was great why it lasted. And hopefully you did everything in your power to basically convert those prime customers to your customers and build your list with it. That’s literally on Amazon’s page talking about this program, their selling point for this literally is.
[00:15:05] Turn prime members into your customers. That kind of blows my mind because that’s something that Amazon would never like, that was like, no, yeah, that’s outta charact. Our customers were never gonna, we’re never gonna trade or you’re never gonna have this information. So I think they do see. They’re writing on the wall to partner with brands more effectively on this.
[00:15:21] I think that they need to, I think that what you mentioned with deliver and Shopify, the other thing with Shopify, that’s really interesting is the Shopify, the shop app that they’re rolling out. Yeah. That’s one way that they are bringing together all of these different websites in their ecosystem into easy to find format on a mobile phone.
[00:15:37] And I think it’s being I don’t think enough people are paying attention to it because what I’m seeing in analytics in. Customers and clients that we have with Shopify is it’s driving. We’re returning customers and it driving a large portion of referral and high converting customers. . So if you’re not implementing that on your Shopify store, you need to be using the shop app that’s from Shopify.
[00:15:58] But I think those two things you have deliver fulfillment, cuz Shopify was trying to get into their own fulfillment for a while. Like they rolled out Shopify fulfillment and it was a bit of a disaster. It didn’t really work as well as they wanted it to. So I think deliver was their ability to say, Hey, let’s shortcut this process and buy, something that we can incorporate and they’re starting to bring these different tool sets together.
[00:16:19] I think to get more exposure to everyone in their ecosystem, which is direct competition to Amazon. So Amazon’s play. And I would say this is an extension from Amazon’s perspective on. This is a deeper extension of what they’re doing. For example, we’ve talked about before, on this show, the brand referral bonus where Amazon would pay or pay back.
[00:16:39] Percentage up to 10% of the 15% referral fee that they charge in every sale to brands that are sending external traffic in and buying your products on Amazon. So I think we’re just seeing the, the uptick in the war. If you would, that’s starting to cook between these places. I think you look at sort of the Shopify, the Amazon and the Walmart, all battling it out in the eCommerce space.
[00:17:00] I think ultimately it’s gonna bode well for the actual brand owners and multichannel sellers.
[00:17:06] Jason: I think it’s important for every Shopify seller to ask themselves, what advantage does this bring to you? And one of the advantages could be speed. Yeah. And the reality is if how can you not compete with Amazon?
[00:17:19] And one of the ways you can not compete with Amazon is you literally just can’t get orders out the door as fast as they can. And, Chris, to your point earlier, ordering something on a Sunday and getting it, in, in an hour or two or whatever, the backend operation of most Shopify sites look like somebody sitting there printing out the orders, stuffing stuff in the box, taking it to the, waiting for the postal guy to come or taking it to the post office before, four 30 or five o’clock every afternoon.
[00:17:44] And the best you can do is, maybe get out the door, same day, you get the order, but much more frequently it’s a day or two or three. And one of the value propositions originally to shop. compared to being on eBay was eBay would actively harm your seller account. If you ship slowly, they would ding you if you ship slow and and Shopify you’re like I can ship anytime I want.
[00:18:11] I can ship in four days. I can ship them three days. It doesn’t matter. Cuz the customer, their expectation is different on my site. That was 10 years ago. Think. Now it’s what does Amazon have that you need? And speed might be the answer. And so the question is how much do you have to pay for that?
[00:18:25] Yeah. And if to pay by using FBA. And I think that’s the important calculus to sort through for Shopify sellers.
[00:18:31] Kyle: , but in some scenarios using FBA and Amazon shipping is actually cheaper. Not only is it faster, but it’s also cheaper. Yeah’s cheaper than even using three PLS. Even if you had a three PL that could ship out same day, it still might be cheaper to use Amazon to do the fulfillment for it.
[00:18:47] Cause because you get economies of scale. Yeah. And robots, you get robots like I’ve actually tour in one of these fulfillment centers. There’s doesn’t robot robots bringing you. No, I’m serious. There’s always, there’s like this cage section of the fulfillment center and there’s these robots zipping around and they literally come to the station where the human.
[00:19:04] Standing. And the human says, looks at a screen, says, pick this tray or this drawer, they open it up, grab the thing, stick it in the box. And then once that box is filled, it just goes down the conveyor. And there’s these conveyor belts of boxes flying over your head that are going downstairs to where they all get B put together and boxed up and then shipped out the door.
[00:19:21] It is insane. And I’m pretty sure your three PL doesn’t have a bunch of robot armies working 24 7. Just yeah, just saying.
[00:19:32] Michael: I would just almost flip this on its head and say, if you’re not using somebody as reliable as FBA, you are really risky your business. So I had a client recently who’s Belgian guy.
[00:19:40] He sells in ball. He’s about to launch on Amazon in various marketplaces in Europe. And he had an absolute nightmare cuz he was trying to go multichannel a bit too fast. I tried put that out to him, but he’s gone through his own journey with this and he had a three PL that was reliable and then Netherlands, but couldn’t deliver in Belgium.
[00:19:55] So you. Whatever. It’s gonna be the same in the states, which is a huge country. And that’s one of the things that Amazon’s enabled everyone to forget how huge the United States is. It’s extraordinary what they’ve achieved. I would argue nobody including like the, the United States personal service or the Royal mail, which have been around for hundreds of years has a can’t hot or candle to Amazon in terms of accuracy.
[00:20:15] Nevermind speed. And particularly in your peak seasons, so Q4 most of the time, I think I haven’t got much experience outside the Amazon bubble as a seller personally. So I have to be aware of my bias there, but I would be very worried and scared about using anyone else to fulfill to the consumers out there.
[00:20:31] And to your point, Jason, I think the fact that we don’t see rude reviews turn up on Shopify or get our account dinged. On, eBay style doesn’t mean that consumers aren’t mentally blacklisting us. We just don’t see it. And just cuz we don’t see, it doesn’t mean it doesn’t exist. So I think the expectation for consumers has been set by Amazon and we have to hit that.
[00:20:51] And the simplest way is to simply use Amazon. I would say sure,
[00:20:53] Kyle: they, they are blacklisting you they’re not buying on your site. Exactly. They may not be telling you that, but their lack of actual purchasing is the signal that they’re sending.
[00:21:03] Jason: But that’s not always the there’s nuance there because some customers don’t have the expectations.
[00:21:08] Some sites are all digital goods, in which case they get it instantly. There’s nuance there in terms of how that plays out. But I think the summation of this whole conversation to me is like, Amazon is fully. Leaning into the omnichannel approach. Kyle and I renamed our business this last year, Omni rocket, because it is an omnichannel world.
[00:21:28] Everybody, everyone is integrating in every way across platforms. And it’s really interesting. So I love it. Okay,
[00:21:35] Michael: Chris, I’m aware you haven’t had a safer while. So plunge in, what are your final thoughts on this? I know we
[00:21:40] Chris: gotta wrap this up and what from the print on demand world of, apparel and KDP with books It is a little bit different.
[00:21:47] Cause you have to commit inventory, which means you commit money and lead time and actual inventory instead of sitting back and print on demand. But Jason, oh my gosh. Think about what you could do as a KDP seller that has FBA inventory and a website with buy with prime, you can undercut Amazon, you can ship just as fast.
[00:22:04] The margin built into your books is gonna give you leeway to run promotion, offer bonus digital downloads. I could spend the entire. Yeah, I would give up all the other stuff just to do Dubai with prime, with KDP books, integrated with Amazon and sell against them through my own site and build your own customer list.
[00:22:21] It’s unbelievable. Yeah, I really hadn’t put these dos together until now. It’s what you could do as a KDP author there.
[00:22:30] Instead of, Hey, buy from Amazon and then send me your receipt and I’m gonna double check it and I’m gonna send you your download. Forget dad, gimme a break.
[00:22:37] Jason: It’s all
[00:22:37] Chris: it all be automated and done and cheaper, less it’s expensive.
[00:22:40] And, oh my gosh. It’s so
[00:22:41] Michael: good. Yeah, it sounds like we’re all broadly pretty bullish on this whole buy with prime thing. That, that’s what I’m taking from today. I know we’re gonna wrap up, so I won’t do the traditional round, the table, final thoughts, but if you are listening folks talking.
[00:22:54] Quick round the table. This is our last panel show in the current format on call in. We’ve decided that call in’s been, instant place to be, but we’re gonna simplify things down and just stick with the usual podcast channels and also probably change the format a bit as well. Cuz sometimes we’re having the best conversations off air after the recording has stopped and we wanna make sure we got those conversations and share them with you..
[00:23:15] So we are not gonna be found on callin as a sort of quartet as a panel, but we will be available very much on, the other usual places you can find us that is to say Spotify and apple podcast. And with that, I’m gonna have a wrap up cuz you’ve got a dash off into the next meeting. So thank you so much for listening to the eCommerce leader.
[00:23:33] Hot takes, call in show.
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