Amazon looms over Shopify: Analysts worry that Buy with Prime will further eat into Shopify's profits
This story is available exclusively to Insider subscribers.Analysts are increasingly negative on the impact Amazon's Buy with Prime could have on Shopify. Shopify said it is in talks to launch a direct integration for Amazon's new checkout tool.
In a note published on March 19, a group of UBS analysts led by Kunal Madhukar said that their outlook on the impact that Buy with Prime could have on Shopify has grown"incrementally more negative." Currently, if a shopper checks out with Buy with Prime, they get taken directly to Amazon's website to complete their purchase. That moves the shopper out of Shopify's checkout systems. Because Shopify doesn't receive information about those transactions, it can't charge merchantsThis suggests that the impact to Shopify's profits"could be significantly larger than what we had discussed previously," the analysts wrote.
Amazon said it continues to add new features to Buy with Prime, but it's not clear whether it can add them to Shopify merchants' site without its cooperation. If Amazon can develop those features without Shopify's support, then Shopify"has limited leverage," the UBS analysts wrote.
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