Store Stock: Shopify taps into the Amazon Network; ‘Buy with Prime’ no longer a threat?
E-commerce software and services provider Shopify (Shop) will benefit from the giant industry Amazon.com‘s (weigh up) a wide distribution network, although the financial terms of the deal have not yet been disclosed. SHOP STOCK popped up on Thursday.
X
Meanwhile, Amazon is IBD stock of the day.
Amazon now offers its own massive distribution network to merchants who do not sell goods on its website. The product fulfillment services are part of a program called Buy With Prime. Amazon announced late Wednesday that it will launch an app that will give US merchants access to the Buy with Prime service.
According to Deutsche Bank analyst Bhavin Shah, the new app integration will give Shopify merchants who use Amazon’s fulfillment network the ability to seamlessly add a Buy with Prime button. They can go to the detail page for each product they choose to include as part of the programme.
He also added that Prime members will choose the payment method from their Amazon wallet and Shopify Payments will process the transaction – via Shopify checkout. Customer data will remain with the merchant.
Store Stock: Amazon Now An Enemy?
“Shopify will process all payments from Buy with Prime transactions transforming Buy with Prime from a potential threat to Shopify’s payment flow to accelerating Shopify Payments’ penetration of total merchandise volume,” Shah said in a note to clients.
In early June, Canada-based Shopify completed the sale of its fulfillment unit, easing investor concerns about rising costs.
In today’s stock market, SHOP rose by 10.8% to close at 66.49. AMZN rose 2.2% to 138.01.
“Investors no longer need to worry about BWP eroding the total addressable market (Shopify); and with transactions processed via Amazon Wallet through Shopify Payments, we expect full access to data and at least some price participation,” SHOP Equity Analyst Kenneth Wong Who said Oppenheimer in his note to clients.
Shopify is selling the fulfillment module to Flexport
“We see the potential for the Amazon partnership to improve the merchant fulfillment experience and increase conversion, consistent with the primary focus of Shopify Management.”
Shopify announced the sale of its fulfillment business to privately held Flexport on May 4th. In addition, Flexport will be the logistics partner of Shopify under a revenue sharing arrangement. In addition, Shopify now owns a 13% stake in Flexport.
Shopify sets up e-commerce sites for small businesses, partnering with others to handle digital payments and shipping. Furthermore, the company is building a US distribution network to stock and ship the products to its commercial customers.
AMZN stock is up 60% so far in 2023. SHOP stock has jumped 73%.
Follow Reinhart Krause on Twitter @reinhardtk_tech For updates on 5G wireless networks, artificial intelligence, cybersecurity, and cloud computing.
You may also like:
How to use the 10-week moving average to buy and sell
Get Free IBD Newsletters: Market Preparation | Technical report | How to invest
IBD Live: A new tool for daily stock market analysis
Do you want to get quick profits and avoid big losses? Try swingtrader
