Buy with Prime fees are 20-40% per transaction, or even more for items below $20 due to the $1.50/order minimum Prime service fee. Yet, fees are not as critical as whether Buy with Prime is worth the operational investment.
Buy with Prime fee includes the Prime service fee, the fulfillment fee, the storage fee, and the payment processing fee:
- Prime service fee (per order): 3% of order value (minimum $1.50/order)
- Payment processing fee (per order): 2.4% of order value plus $0.30; applies until 4/30/2023 (compared to a standard 2.9% plus $0.30 rate)
- Fulfillment fee (per unit): starting at $5.38 for 1 unit order; gets cheaper per unit for orders with more than 1 unit
- Inventory storage fee (per cubic foot): $0.87 per cubic foot per month
Buy with Prime service fee, presumably, charges for a Prime member more likely to check out due to the presence of the Buy with Prime button. Amazon claims that adding the button lifts conversions by 25%, a claim yet to be verified by anyone else. If true, 3% for a 25% lift in sales is a no-brainer. The service’s payment processing fees are in-line with other e-commerce providers.
Buy with Prime fulfillment fees are based on the product’s weight and size, the same as Amazon’s Fulfillment by Amazon (FBA) or Multi-Channel Fulfillment (MCF) fees. BWP fulfillment fees are slightly higher than FBA but are mostly lower than MCF and are significantly cheaper than MCF for the same two-day delivery: a product in the “Large standard” size tier costs $3.86 to fulfill with FBA, $5.80 with Buy with Prime, $7.35 with slower and $9.53 with two-day Multi-Channel Fulfillment.
Buy with Prime fulfillment fees are competitive or near average compared to alternatives like Shopify’s Fulfillment Network (SFN) or other 3PLs. It’s hard to compare accurately because not all services focus on Prime-like two-day delivery, few include returns in their pricing, and many have different size tiers and storage fees. Buy with Prime is not a replacement for 3PLs since it only fulfills orders for Prime members, but for some, Amazon could become their sole fulfillment network if they choose to use MCF for non-Prime website orders.
E-commerce would likely do better by relying on Amazon less than more. But this month, Amazon is making Buy with Prime available to all brands after launching it as an invite-only program in April 2022.
Buy with Prime is not a competitor for Apple Pay, Shopify Pay, or other one-click checkouts, nor is it competing for fulfillment business with Shopify’s Fulfillment Network or other 3PLs. Instead, Buy with Prime is a buy-in to the Amazon-Prime flywheel ecosystem. And thus, Buy with Prime fees is unlikely to be a show-stopper. The crucial consideration is whether enough Prime shoppers shop on the brand’s website for the brand to consider sending some inventory to Amazon.