In a shot across the bow of shipping and logistics rivals %FedEx ($FDX) and %UnitedParcelService ($UPS), %Amazon ($AMZN) has announced that it will let other online merchants use its Prime service to deliver goods quickly to their customers worldwide.
The e-commerce giant has launched a new service called “Buy with Prime” that lets third-party merchants use Amazon’s vast shipping and logistics network to fulfill orders on their own websites, while also appealing to Amazon’s 200 million-plus Prime customers.
Merchants that use the new Amazon service will be able to put the Prime symbol on their websites next to items that are eligible for free two-day or next-day delivery. Prime members will be able to use the payment and shipping information stored on their Amazon accounts to place orders with merchants that use “Buy with Prime.”
Buy with Prime won’t be free for sellers, and pricing will vary depending on payment processing, fulfillment, storage, and other fees, said Amazon.
To start, the service will only be available by invitation to sellers who already use “Fulfillment by Amazon.” With that service, merchants pay to have their inventory stored in Amazon’s warehouses and to make use of the company’s supply chain and shipping operations. Amazon plans to expand Buy with Prime to other merchants over time.
Amazon has long had a goal to be the fastest company in online delivery. For years, the e-commerce giant has plowed profits back into physical expansion, growing its fulfillment centers and shipping partnerships around the world to offer two- and same-day delivery in most markets.
Today, Amazon has a massive fleet of its own delivery drivers, trucks, and planes to speed packages to customer doorsteps anywhere in the world.
Analysts have paid close attention to Amazon’s growing in-house logistics operations, speculating that it aims to directly compete with major shippers such as UPS, FedEx, and postal services. Amazon has said that it is on track to become the largest delivery service in the U.S. by the end of this year.
Amazon has already turned its shipping and logistics operations into a profit generator. The company reported that third-party seller services, which includes commissions, fulfillment, and shipping fees grew 11% year over year to $30.3 billion U.S. in the latest quarter.