Amazon, Shopify Strike Deal to Open Amazon Logistics to Sellers

Amazon, Shopify Strike Deal to Open Amazon Logistics to Sellers

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(Bloomberg) — Inc. and Shopify Inc. have struck a deal to allow merchants who pay for Shopify’s e-commerce tools to use Amazon’s logistics network.

The two companies, which both sell e-commerce software and services to brands and merchants, say Amazon’s “Buy with Prime” will soon be among the tools available to Shopify’s merchants in the US. The program started Wednesday for invited Shopify sellers, and will roll out to all Shopify merchants who want to use Amazon’s logistics network by the end of September, Amazon said in a statement. 

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Shopify shares climbed more than 2% in extended trading, while Amazon stock rose less than 1% after the partnership was announced.

Amazon launched Buy with Prime last year, a move widely seen as an effort to blunt the momentum of Shopify. The Canada-based company grew rapidly in recent years by building e-commerce tools that promised to help brands sell goods from their own websites, rather than on a marketplace like Amazon or eBay. 

Amazon, the largest US online retailer, commands a gigantic customer base, but has drawn complaints from some of its sellers for dictating terms and being slow to respond to their concerns. 

Buy with Prime enables merchants who use Amazon’s payment and fulfillment services to include Amazon’s checkout service and speedy shipping guarantees on items sold from their own sites. Amazon says the integration makes shoppers more likely to make purchases from unfamiliar brands or websites because they trust the experience with Amazon.

Under the deal announced Wednesday, Shopify Payments will process the payments through the company’s checkout service. Previously, Shopify had warned merchants who used Buy with Prime that the integration violated Shopify’s terms of service, and prevented it from protecting against fraud, according to Marketplace Pulse, which tracks online sellers.

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