More than half of the top 1000 sellers on Amazon are using Fulfilled by Amazon (FBA) and as a result, an overwhelming majority of their items are eligible for Amazon Prime, a fast shipping program that ensures quick delivery (among other things). This isn’t by chance. Amazon Prime members have topped 100 million, making the program larger than Costco. All of those members prioritize items that are Prime eligible when they shop and buy.
Here’s how Amazon Prime changed the focus from price to shipping. Knowing these trends, and that it’s already happening with other marketplaces, will help you get a leg ahead of your competition.
Amazon Before: A focus on price
This is what Amazon’s website looked like on July 4, 2010, courtesy of WaybackMachine.
On their homepage, they focused on hot items, what other customers were looking at, and price. Before Amazon Prime, the marketplace’s focus was shifted to deals.
Enter Amazon Prime. Although Prime launched in 2005, it didn’t start investing heavily in the program until much later. Even then, in 2012, it was estimated that Amazon spent $11 more money than it earned per Prime user.
This was an opportunity for sellers to get on Prime and ride the wave that Amazon created with their massive marketing spend. When Amazon pushed Prime, all sellers who had Prime-enabled listings benefitted as well, due to increased prominence in the marketplace.
Amazon Today: A focus on Prime
Today, their website now features Prime in multiple locations on their homepage, including right on their logo.
Amazon also reorganized their site architecture around Prime listings, including preferential treatment with Amazon deals and the buy box. Take a look at how Amazon’s search results for a “television” all feature Prime-enabled items.
Not only is “Prime” a filter that stands out (it’s colored blue and near the top of the filter options), there is also a Prime-enabled sponsored item at the top, and 9 Prime-enabled items before we get to the first non-Prime television search result.
Needless to say, Amazon is pushing for Prime and many sellers have taken note. However, back in 2005 and 2006, when Amazon Prime and FBA were first getting started, the competition wasn’t as cutthroat.
All of the eCommerce sellers who moved quickly to join Amazon Prime and FBA had a leg up when Amazon started pushing Prime with their platform. They were able to do this with daily deals, featuring fast shipping, and making it easy to filter by Prime.
For example, Woot is a daily deals website purchased by Amazon in 2010. In addition to offering great daily deals, they also have special shipping benefits for Amazon Prime members like free standard shipping.
How early-movers benefit from fast shipping programs
All of the FBA/Prime-enabled sellers received a tremendous leg up on their competitors. Here’s how the cycle went:
- Early movers were able to get traction on their listings for the reasons illustrated above.
- This got more sales, which enabled them to source at cheaper rates.
- Cheaper rates allowed them to invest more in optimization and quality control.
- So they show up higher in search and have better processes in place (product preparation, etc).
If you missed the Amazon Prime boom, don’t worry. We expect to see similar trends with other marketplaces, such as eBay, Walmart, Google and Wish.
For example, on eBay daily deals, we’re starting to notice a big uptick in the percentage of listings enabled with eBay’s new fast shipping program, eBay Guaranteed Delivery (eGD). We’ve also seen it’s easier to get featured on eBay deals when you have eGD. Walmart and Jet are now entirely architected around listings with free 2-day shipping (search results, buy box, etc.), with listings not having that tag showing up last.