Amazon just announced the arrival of their 3P self-service subscription marketplace–not to be confused with Amazon’s Subscribe ‘n’ Save program, which is an entirely different beast.
Unlike the Subscribe ‘n’ Save program, which is available to FBA sellers of physical goods such as toilet paper, the Subscribe with Amazon program doesn’t support physical subscription products.
If are currently selling software–or are planning to launch software–this program could provide you the exposure you need to get your product up and running.
And if you don’t sell software, eventually, Amazon may adjust the program to include physical products alongside subscriptions, so don’t write it off yet.
Let’s get started learning the ins and outs of this new program.
What are the Benefits of the Subscribe with Amazon Program?
Let’s get one super obvious benefit out of the way: You get access to millions of customers. Not only that, some of these customers are notoriously loyal (Prime).
Here are a few other benefits to using the program:
- Dedicated detail page
- Offer pricing options for your product
- Generate Prime-exclusive deals
- Get featured on the Amazon storefront
Whether you are just starting out in the subscription space or you’re seeking a new channel to expand your subscription base, there’s no question this is a solid move for most subscription providers.
Who Can Apply for the Subscribe with Amazon Program?
Aside from not selling physical products, there are a few caveats to selling on the Subscribe With Amazon program.
Here’s what Amazon requires for sellers on the platform:
- Your subscription must be a digital app, website, or software
- You must have a business address in the U.S.
- You must only sell to customers in the U.S.
- Your customers must pay a recurring fee to access your product/service (no free apps allowed)
If you don’t fit all of these requirements, it’s still worth it to sign up to stay updated in case any of these stipulations change. It’s likely they will first expand internationally before changing requirements to include products.
Curious about your competition?
Here are some of the current subscriptions available on the platform:
- Fitstar Personal Trainer
- Sling TV
- Consumer Reports
- Headspace Meditation
- The Wall Street Journal
- The New Yorker
There’s more, too–everything from respected publications to virtual health trainer apps are on the platform.
This list is sure to expand in breadth in the next few weeks as the program takes off.
Who’s Amazon Competing With?
Amazon’s not new to the subscription service game.
So who are they competing with on this new program? App stores?
Tien Nguyen, Director of Technology at CPC Strategy, doesn’t believe Amazon’s truly competing with anyone this time–or at least not those we’d expect.
“The [Subscribe with Amazon program] is like an extension of Amazon Payments. It just makes it easier for people to subscribe to things they may not purchase otherwise, and provides Amazon with another revenue stream.”
Nguyen continues, “I’d compare it to the Facebook login. It’s easier to register for a website if it’s just one click rather than entering your email and setting up a password. If the barrier to entry for subscribing to a $5/month service and having to go through a full registration process can be eliminated, you’d expect to increase conversion rates.”
TL;DR–this could raise up new competitors in the “lazy login” space.
“I wouldn’t be surprised if Facebook releases a similar model given the ubiquity of their login and their push towards payments,” explains Nguyen.
What if your products compete directly with Amazon’s own subscription services?
One of the biggest questions our team raised was around competition. If Sling is on the platform–assuming Sling is a direct competitor of Amazon’s video services–why are they allowed?
Jeff Coleman, VP of Marketplace Channels at CPC Strategy, doesn’t believe Amazon’s too worried about that:
“To me, that’s no different than Amazon allowing potential competitors to sell products on their marketplace when they originally opened that up. If they can be the ones to bring customers and providers together while also offering their own content alongside those services, they’ll have a more complete offering for the customer than anyone else can offer.”
However, it’s worth noting that if you are a provider of music or video subscriptions–think Sling TV, which is a current subscription provider on the platform–Amazon does put you through a stricter vetting process.
Per the Subscribe with Amazon website:
“Offerings in the music or video categories may require additional approvals and applications from sellers seeking to list those products will be reviewed on a case-by-case basis.”
If this is you, it’s important to keep this in mind as your approval process may take longer than a typical seller’s would.
How Does The Subscribe with Amazon Program Work?
How Customers Access Subscriptions
Customers can access their subscriptions on any supported OS, Android, or Fire device. They can also manage their subscriptions directly within their Amazon account.
Detail Page Setup
As a subscription provider, you can customize your own detail pages for subscriptions. These include:
- Product information
- Brief description of your subscription
- Pricing for tiers/plans
- Promotional offers
Amazon provides stipulations for style and setup. See both documents below:
Payment for Sellers
The payment system is a unique one. According to Amazon, here’s what payments will look like:
- Customer’s First Year: 70% of each transaction
- After Customer’s First Year: 85% of each transaction
No, it’s not 100%–but if you tend to generate long-term subscribers and your biggest pain point is exposure, then the Subscribe with Amazon program could be very well worth it, even with Amazon’s 30% skim off the top.
How to Apply
If you fit all requirements and you’re interested in applying for the program, you can do so here.
You should receive an email within two business days acknowledging receipt of your application, but your approval will take longer, particularly if you sell subscriptions to video or music.