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Understand what is the Amazon DTC master plan

Amazon DTC
January 17, 2023 6 mins to read

Amazon has successfully built the right framework to conquer the e-commerce industry. The last few years were a strong indicator of how the business has been catering to its ever-growing customer demand.

According to sources, their total revenue outcome for the year 2022 was 469.82 billion U.S dollars. As an innovator in the e-commerce industry, Amazon is known to expand to new dimensions with its new goals.

Amazon is now set out to create another flywheel – Buy with Prime. This new process is said to affect the payment gateway and fulfillment methods. Also, learn how the DTC sellers will be able to offer this to customers. Read till the end to understand the Amazon DTC master plan. 

What is the objective behind the Amazon DTC master plan?

The Amazon DTC master plan envisions a big goal. E-commerce shoppers will be able to shop on other websites using their own Amazon Prime accounts. You can easily check out a website with the help of your prime account. 

This is not the first time that Amazon has introduced a pan e-commerce utility from their side. Amazon introduced the Checkout by Amazon initially. This was then revamped to the popular name that you might know as Amazon pay. Checkout by Amazon and Amazon pay have the same principle. The steps were 

  • Log in with the Amazon Prime user id and password.
  • Use a credit card to pay.
  • Choose an address added to the account. 

It is unclear how many customers are currently using the provided option. The option to checkout with Amazon pay is provided on thousands of e-commerce websites. 

Buy with Amazon connects Amazon pay with Amazon FBA. The “Buy with Amazon” option is not considered only as a payment gateway. It also promises to give the customer a quick delivery time and a free shipping option. Amazon aims to reel in more customers with the Amazon Prime name.

Although many sellers are already offering a 2-day free delivery option, Amazon is a trustworthy and established entity. Hence customers will choose Amazon over other options. Amazon aims to bring small sellers under its blanket with this move.

Are there any limitations with the Amazon DTC 2022 plan?

Limited Pickup option.

Although Amazon offers so many options through the buy with the prime feature, there are some limitations to the model. The buy with prime release news states that the feature will “eventually support FBM (Fulfilled by Merchant) mode sellers.

This means that the sellers won’t be able to sell from their warehouses. All non-FBA sellers will now have to send their merchandise to the Amazon warehouse. Only after this will the products be cleared for pick up by Amazon. 

Partial payment gateway dependency.

The buy with prime option will not be available for customers who are not Amazon prime members. This means that sellers won’t be able to track all their order payments from one single gateway.

Sellers will have to maintain this gateway as an option for prime members and use other payment methods for other users. This also creates a challenge of maintaining different multiple fulfillment strategies. 

DTC master plan in its starting stage

Another drawback is that there are no current websites that are running live with buy with prime. There is a lack of clarity on what will be the fee for the buy with the prime model. Amazon has not stated the exact amount that the sellers will be charged.

Although Amazon has taken over the e-commerce industry with ease, we would have to wait and watch how this will work as a payment channel. With other competition like Paypal, Apple Pay, Buy now pay later, etc, we may see a specific strategy by Amazon to rise to the level of the other checkout options. 

The buy with the prime program best suits the existing Amazon sellers. They already know the existing strategies and will have their stock ready to be shipped to the Amazon warehouse.

These are the sellers who are actively trying to expand their business outside of Amazon. Even though there is a brand value perspective, sellers might be a bit reluctant to send their stocks to Amazon warehouses only when prime members. That too avoids the use of the known gateways as Klarna and Shop pay. This may be another buy with prime limitations. 

Who will the Amazon DTC master plan impact & how will Amazon leverage it?

The buy with prime is targeted toward sellers looking to increase their band outside of the Amazon website. Once a seller links this to their organization’s website, the prime logo can bring in the trust factor so that a customer can make quick decisions.

The buy with prime will impact these DTC sellers and will be a possible chance to grow. Amazon can also track the number of clicks or sales by assessing the payment gateways to gain knowledge of sales. Amazon can also understand who is selling better on their website.

How can merchants offer to Buy with prime?

Buy with prime is only offered to FBA merchants. Once these merchants choose to come on board, this will only take a few steps. You can go to their website and enter the interest list since the program is invite-only.

Once your account is linked, you can access the shopper information. You can access their email ids to develop a strong customer relationship. You can also create a line of loyal customers who love your brand through this. 

Final Word

Amazon DTC’s master plan is definitely in its early stages and has a lot of scaling to do. Once the model has multiple websites and a good transactional relevance, we can define it as a solid payment gateway.

With the help of the prime badge, sellers can easily increase their sales. Amazon buys with the prime program is a plan that can boost the growth of DTC sellers. Amazon is known for its high-scaling innovation and it would not be a surprise to see the buy with prime program creating waves of change in the e-commerce industry. 

Additional Read:

Amazon Q4 Mastery is Back! Here are all the deets!

10 CPG Trends to Watch in 2023.

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4 Comments on “Understand what is the Amazon DTC master plan”

  1. Joshua
    October 28, 2022

    Thank you for being so supportive and insightful!!

    1. Arishekar N
      October 28, 2022

      Glad you liked it.

  2. Juliei
    October 28, 2022

    Thanks for the great article.

    1. Arishekar N
      October 28, 2022

      Glad you liked it.

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