New research highlights Amazon’s Prime advantage even as eBay tests a new fulfillment system for sellers. In a report released on Thursday, Consumer Intelligence Research Partners, LLC (CIRP) estimated that 62% of Amazon customers are Prime members, or about 101 million members.
But what really demonstrates the power of Amazon’s paid membership program is this finding from the report: Prime members continue to spend on average about $1,400 per year compared to about $600 per year for non-member customers, according to CIRP.
Prime is a virtuous cycle: sellers are attracted to Fulfillment by Amazon so their products show up as offering free shipping to Prime members; and buyers are attracted to Prime so they can get free shipping on many more products than offered by Amazon alone. The more Prime members there are, the more sellers wish to use FBA, and the more products offered by FBA sellers, the more valuable Prime shipping becomes to shoppers.
Meanwhile, eBay sent out an invitation last week inviting sellers to participate in a pilot fulfillment program, but it’s unclear if eBay will launch an accompanying Prime-like membership program for shoppers. If so, the fulfillment program would have a greater chance of appealing to eBay sellers.
eBay currently offers a fulfillment program for sellers with an accompanying membership program for shoppers (eBay Plus) in two countries, offering a glimpse into how the program might work in the US.
As a seller pointed out in the comments of the EcommerceBytes Blog, “Amazon has a buy box, and a PRIME program. The entire purpose of FBA is to win the buybox for Prime shoppers, and yes, you can charge more for the same product and still have velocity.”
Note: CIRP provides securities research to the investment community.