Dive Brief:

• Amazon has been expanding its Prime program by shipping items directly from merchants’ own warehouses, the Wall Street Journal reports.

• The shift from having merchants send goods to Amazon warehouses for Prime fulfillment could boost the number of items that can be sent under the retailer’s free two-day shipping, which only Amazon Prime members enjoy.

• One merchant speculated to the Wall Street Journal that just 10 or so sellers are able to list items sent from their own facilities as Prime-eligible and that Amazon is keeping a close eye on the sellers’ track records for speed and customer service.

Dive Insight:

Having merchants ship their own Prime-eligible items is a sort of Amazon version of “ship-from-store” fulfillment. It’s a logistics move that can increase shipping speed at lower cost, and something other retailers have employed in part to fight Amazon itself.

Amazon is facing increasing competition in the membership space, with the likes of newcomer Jet online and even Wal-Mart trying out the membership model, and in the shipping space, with retailers of all kinds making it cheaper and easier for customers to get their orders faster.

While Amazon Prime members enjoy several added perks like entertainment and music streaming and photo storage, the two-day shipping they enjoy applies to just some 14% of items available on the site. Boosting Prime membership is simply Amazon’s best bet when it comes to locking in customers, so it’s no surprise the retailer is making it even more attractive.