Shopify And Amazon To Integrate

The week is looking to end up nicely for those holding Shopify share — an announced e-commerce partnership with Amazon has sent stock prices up 8 percent.

The bounce came on formal confirmation of news that Shopify has completed a long-awaited integration with Amazon that will connect Shopify’s large merchant base with “millions of potential Amazon customers.”

The intention to integrate to the two platforms was first announced in September of 2015 but has not been made generally available until now. With the opening up, Shopify merchants will be able to manage their product catalog for a host of digital channels. The Amazon store will now be one of them.

Some, like Piper Jaffray’s Sam Kemp, have found the move surprising — and clearly a major labor given the amount of time the full integration took — but as of yet, it is unclear what the effects for either firm will be in the long run.
Users will be able to use the Amazon channel for free, Kemp noted — so Shopify gets a boost to its product, which could in turn help make their overall service menu more attractive for new users.

“This isn’t a direct economic vehicle for Shopify,” Kemp said. “Shopify won’t make money on the extra volume from Amazon. However, it could make Shopify more competitive with other e-commerce platforms, such as Magento.”

Whether the bump in price will last remains to be seen — after hours trading saw Shopify lose about a half a percent in stock value.

Rosenblatt analyst Kirk Adams noted that more likely than not, the sales partnership would be a big boost for Shopify, although there could be some risk for cannibalization. Currently the firm works with about 350,000 businesses in 150 nations worldwide — in both physical and digital merchants.

As of yet, Amazon has offered no official word on the complete team-up effort.


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