Shopify and Amazon announced a tighter integration between the two e-commerce powerhouses today through an expansion of their existing integration. The increased collaboration allows Shopify merchants to create Amazon listings in seven new product categories. The announcement also includes added support for Amazon’s Brand Registry.
This announcement is significant because it expands the available categories from a single category, “Clothing and Accessories,” to:
- Clothing and Accessories
- Toys and Games
- Sports and Outdoors
- Patio and Garden
- Sewing, Arts and Crafts
- Beauty and Personal Care
- Health and Household
Shopify and Amazon Brand Registry Update
Shopify sellers selling branded products can sign up for protection under the Amazon Brand Registry. If the brand is enrolled, approved, and chooses to list through Shopify, then they will no longer need a UPC/EAN/GTIN. This move makes sense as Shopify continues to aggressively pursue integrations that reduce friction in becoming an e-commerce entrepreneur.
Who Wins from Amazon and Shopify’s Expanded Integration?
There are many winners here. While it’s obvious that Shopify and Amazon both benefit from their partnership (or else they wouldn’t expand it), their customers benefit in many ways as well. When these two e-commerce giants team up, both of their customers gain access to a wider selection of products:
- Shopify Customers – Shopify customers (meaning the store owners using the Shopify platform) get a new distribution channel with a built in audience.
- Amazon Customers – Amazon customers get an increased selection of unique products.
- Shopify – Shopify makes a significant percentage of its $150mm not from subscription fees, but as a percentage of net revenue on every sale on the platform. The more sales they get through Amazon, the better their stock price.
- Amazon – Shopify has amassed 500,000 customers as of September 2017, and many of them new e-commerce entrepreneurs. The e-commerce community is extremely focused on Shopify as the go-to platform and many of these entrepreneurs have never sold on Amazon. Entrepreneurs who see success with this integration will devote more and more resources to selling on Amazon.
Who Loses from Amazon & Shopify’s Expanded Integration?
Drop shippers don’t gain anything from this new arrangement. As of late 2017, the Amazon Marketplace is saturated with products from Aliexpress. There are dozens of identical listing at near zero or even below zero margin. It is becoming increasingly common for Chinese manufacturers to cut out the drop shipping middlemen by marketing and selling directly to end-customers on Amazon.
An excellent example of this is our e-commerce store GetLightUpShoes.com where we drop ship LED shoes. On our Shopify storefront our shoes retail and sell for $59, and we buy them from China for about $23. If we do a quick search for ‘LED shoes’ on Amazon we see they are available for as low as $8.99.
This is a symptom of the built in audience that sellers on Amazon enjoy. Chinese manufacturers still don’t understand the US market well enough to market to US consumers.
Launching a standalone storefront on Shopify wouldn’t do them any good because they would be unable to send traffic to their own Shopify store and convert that traffic into sales. However, they are well equipped to compete on price, and Amazon has millions of searches a day from consumers looking for a good price.
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