On Monday, Amazon (NASDAQ: AMZN) announced that it has opened a self-service marketplace for digital subscriptions, including everything from Dropbox, Fitbit and eMeals to Sling TV, Legal Zoom and The New Yorker. The marketplace, called Subscribe with Amazon, allows consumers to discover new subscriptions through searches and recommendations and to manage their subscriptions directly from the Subscribe with Amazon portal.
“Over the years, Amazon has gained extensive experience in the memberships and subscriptions space, innovating across programs like Prime and Kindle Unlimited,” said Lovina McMurchy, general manager of Subscribe with Amazon, in the announcement. “Today, we’re excited to extend our selection by offering subscription businesses a self-service way to make their subscriptions available to millions of Amazon customers.”
The Subscription Experience
March 4, 2021 • Noon Eastern
Subscription companies can apply online to become part of the program. They must meet the following criteria:
- Their digital subscription is a digital app, website or software.
- They have a business address in the United States.
- Their customers pay a recurring fee to access to their digital products.
In addition, Amazon says that subscription companies that provide music and video subscription services may require additional approvals before being accepted into the program.
Once accepted, companies can build a customized subscription page featuring up to three images and details about the subscription packages. Subscription companies have full control over pricing, including free trials and introductory pricing. They can offer different packages, pricing tiers and monthly or annual payments. In addition, subscription companies can offer exclusive promotions and discounts to Amazon Prime customers. Amazon says that subscription companies are eligible to become featured subscriptions, but it does not specify if that is a paid service or if they are randomly included as a featured item.
This subscription marketplace gives subscription companies another opportunity to sell their wares to new prospects, but there’s a catch. Amazon retains 30 percent of the revenue earned from a subscriber during the first year of their subscription, and 15 percent of revenue in subsequent years.
This is the same pricing structure the App Store offers subscription companies like Spotify and YouTube TV. Apple used to take a 30 percent cut per year, the so-called Apple tax, but the company changed their pricing structure last summer to be more attractive to developers and subscription providers.
Creativebug is one of the subscription providers listed in the Subscribe with Amazon marketplace. Co-founder Julie Roehm comments on the marketplace.
“Selling on Subscribe with Amazon gave us a whole new channel to reach new customers. The integration process for joining the marketplace was easy. The step-by-step integration guide gave us a checklist of everything we needed to do, and the sample seller account let us see what to expect before we even started,” Roehm says in the announcement.
What Amazon has created is not exactly new. Both the App Store and the Google Play store have a marketplace of sorts, and there are subscription box marketplaces that aggregate subscription box services in one place. However, Amazon is taking that one step further, putting all different types of digital subscription services in one place and making it easy for subscription companies to sell their products for one-stop shopping.
We like the idea of having one place to purchase and manage subscriptions, especially with so many subscriptions available, which can be overwhelming to subscribers. This marketplace seems to be good for all involved – potential subscribers who can do all of their shopping, subscription management and payments in one place, subscription companies who now has direct access to Amazon customers and might be discovered more easily, and Amazon, of course, who will profit by providing the infrastructure.
There are likely to be kinks that need to be worked out, but Amazon is typically known for innovation and quality customer service, so we expect them to react quickly to any changes that need to be made as more subscription companies and subscribers sign on.