Cathie Wood's Ark Invest Sees Amazon-Shopify Tie-Up As Mutually Beneficial

An analyst from Cathie Wood-led Ark Investment Management sees the new tie-up between Amazon.com Inc. AMZN and Shopify Inc SHOP aiding both parties. Under the agreement announced last week, Shopify merchants can now offer ‘Buy with Prime’ for payment processing and fulfillment.

What Happened: Analyst Andrew Kim sees the agreement benefiting Amazon by giving it access to a new customer acquisition channel and higher fulfillment revenue. New Amazon Prime subscribers will benefit from the value of Prime's 1–2-day delivery, order tracking, returns, and easier checkout, they noted.

Shopify merchants, in the meantime, will gain access to Amazon’s fulfillment network while continuing to control 100% of their customer and transaction data as they are all processed by Shopify Payments.

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Why It Matters: Shopify previously warned its merchants against offering Amazon’s ‘Buy with Prime,’ stating that it is in violation of its terms of service.

However, Shopify recently sold its logistics business to Flexport and the company is no longer competing with Amazon in fulfillment, Kim noted. Further, ‘Buy with Prime’ has been shown to increase shopper conversion by 25% on average, according to Amazon.

“Shopify gives entrepreneurs the ability to access and sell across the internet wherever their customers are. Period,” Shopify President Harley Finkelstein said about the tie-up.

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