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Bernstein analysts told investors in a note Wednesday that Amazon’s (NASDAQ:AMZN) Buy with Prime is a $30 billion to $50B opportunity in the US attached to $150B to $200B GMV.
The analysts stated that Buy with Prime is a win for consumers, with Amazon recently publishing a paper highlighting that it could increase check-out conversion rates by up to 25%.
“BWP solves online merchants’ pain points around warehousing and handling for both forward and especially reverse logistics,” wrote the analysts.
They note that merchants remain reluctant to partner with Amazon for fear of losing the direct customer relationship and sharing sales data with a competitor, but they believe that a cart offering (potentially combing both BWP and non-BWP products) is in the works.
“If the sales uplift is anywhere near Amazon’s number, we expect merchants to adopt BWP,” said the analysts.
“If BWP works (big if), Amazon could scale BWP to $2-15Bn in revenues over the next few years,” they continued. “We believe Amazon’s net take-rate for BWP is ~20-25% of GMV, which at first glance appears expensive, but compares favorably to competitive fulfillment services (e.g., Shopify’s Fulfillment Network).”
In addition, Bernstein expects “merchant adoption to track closely with conversion rate improvements and simplified cart functionality.”
