Shopify’s stock surged by 10% after announcing a partnership with Amazon to integrate the “Buy with Prime” service for its U.S. merchants. This program allows Shopify sellers to feature the Prime logo and Amazon’s fast delivery options. Initially exclusive, the feature will later be accessible to all merchants using Amazon’s logistics services. Amazon’s stock also rose by 2% due to the news. The collaboration aims to tap into Amazon’s potentially lucrative $3.5 billion revenue-generating program while leveraging Shopify’s platform and transaction capabilities.
With the news of a partnership with Amazon, which would allow the integration of the “Purchase with Prime” initiative for its merchants, Shopify’s shares saw a strong 10% boost on Thursday.
The joint declaration by the two companies on the previous evening disclosed that merchants associated with Shopify in the United States will soon have the capability to utilize Amazon’s “Buy with Prime” service. This service empowers these merchants to showcase the Prime logo and extend Amazon’s swift delivery choices on their online storefronts. Furthermore, members of Amazon’s Prime loyalty program can finalize their purchases using their Amazon accounts.
Commencing its operations, the feature is currently accessible by exclusive invitation to select Shopify merchants. However, by the conclusion of September, this opportunity will be extended to all Shopify vendors who opt for Amazon’s logistical services, as stated by Amazon.
Following this announcement, Amazon observed a 2% boost in its stock value.
The inception of Amazon’s Buy with Prime took place in April 2022, and industry analysts have projected that this initiative could evolve into a substantial revenue stream for the company over time. The potential revenue generation is estimated at approximately $3.5 billion.
Initial reactions from Shopify were less favorable, expressing concerns that this program could infringe upon their terms of service and impact revenue derived from processing merchants’ payments. Such reservations were highlighted last May in a report by The Information, citing inside sources familiar with the matter. Subsequently, Shopify President Harley Finkelstein acknowledged discussions with Amazon aimed at the integration of Buy with Prime onto the Shopify platform.
As part of this strategic collaboration, Buy with Prime will be seamlessly integrated into Shopify’s checkout service, with transaction processing facilitated through Shopify Payments.