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With Amazon announcing on Wednesday that the 2023 Prime Day sale event will be held on July 11-12, now is a particularly good opportunity for sellers to ramp up promotions.
This year there are some new deal offers being tried by Amazon, including exclusive deals on fast-selling items for Prime Subscription Club members, as well as Prime Day deals that will be available on third-party sites, powered by Amazons Inventories and shipping infrastructure.
Every year there are several planning steps sellers should take before Prime Day, including reviewing the selling strategies they’ll be using, from temporary, deep discounts called Lightning Deals to social media coupons and promotional codes. The options sellers choose can depend on many factors, including their product, budget, social media following, and timing. That requires careful strategies to get the most bang for your buck and the ultimate rewards – more loyal customers and higher sales, not just during Prime Day, but throughout the year.
“The goal of any deal is to get more products into more hands because you want people to become loyal customers. If you don’t do that, you’re wasting your money,” said Phil Masiello, managing director of digital marketing company CrunchGrowth.
Here’s how small businesses should be thinking about promotions to drive sales on Prime Day and beyond:
The cost of selling on Amazon can cut into profits
The cost of selling on Amazon can be significant and varies depending on factors such as a merchant’s selling plan, product category, shipping strategy, and other variables. Ecommerce entrepreneurs can use Amazon’s Seller Central online calculator to estimate the cost and profitability of selling a product on Amazon. They can then factor in the cost of the promotion to decide what to run so as not to eat up too much profit, said Troy Evans, product manager at Skai, an omnichannel marketing platform.
It can often be a decision. A promotion may not be the most profitable, but it could still be worth it because of the increase in sales it brings, Evans said. “That’s the compromise.”
Sellers also need to be aware that consumers on Amazon are extremely price conscious and factor that into their pricing decisions, said Gia Ching, managing director at GCC Consulting, a digital marketing and design firm. “Even 50 cents can make the difference. It can make or break your product.”
There is a lot to learn from Lightning Deals
On Prime Day, Lightning Deals are exclusively available to Prime members, but this type of promotion may be offered on a larger scale at other times of the year. While it’s probably too late to approve a Lightning Deal in time for this year’s Prime Day event, sellers should consider proactively whether the strategy can be used effectively at another time.
“I’ve seen just as much success for Lightning Deals at other times of the year,” said Nick Mattar, founder and CEO of Digital Detroit, a digital marketing company.
Lightning deals usually cause excitement as they are only available for a limited time. Customers can view available deals by clicking the “Today’s Deals” or “Prime Day” link on the Amazon home page. But there are also disadvantages. Vendors pay a non-refundable fee per deal, which can range from $150 to $500 per deal depending on the time of year and the day of the deal, Masiello said.
Offering the deal is no guarantee of success, and Amazon will still cover the fee. Sellers must also meet Amazon’s inventory limit and there are eligibility requirements. For example, a professional seller must have an overall rating of at least 3.5 stars. In addition, a product must have a sales history in Amazon stores and at least a 3-star rating. The product must also not be offensive, embarrassing or inappropriate. Additional criteria for how products can qualify for offers are available on Amazon.
Before sellers decide to offer a lightning deal, they should try to understand how competitor items perform in similar promotions. However, it is information that a company will most likely have to pay to access. Subscription-based tools help sellers discover this type of information, and prices can range from $50 to $1,000 per month depending on factors related to data, sources, tool capabilities, and whether the audience is large or small sellers, said Masiello, whose company offers these types of deals market research. Some tools collect all sorts of information and provide estimates, while others integrate directly with Amazon and use precise data.
And the timing is important. For Prime Day, Lightning Deals sellers should focus on products people want year-round, rather than seasonal items, Masiello said. Categories that have historically sold the most include electronics, home appliances, premium-brand skin and personal care products, technology products, and fashion items.
Coupons can increase sales just like lightning deals
Sellers could also offer their customers a coupon of a certain dollar amount or percentage. Customers can search for coupon offers on the Amazon homepage, filter by them, or see the offer in a single product listing.
“Any type of coupon or promotion on Prime Day generally results in a similar percentage increase in sales as a Lightning Deal,” Mattar said.
Sellers have a cost—a 60-cent fee each time a customer redeems a coupon—that’s something to keep in mind. And sellers need to plan ahead—although the lead time isn’t as long as with a lightning deal. Evans recommends that sellers give Amazon at least 1-2 days to approve a coupon. “If you’re trying to submit something for Prime Day, submitting it in the morning is too short,” Evans said.
Use Amazon Seller Central for promotional codes
In addition to providing the sales calculator and details on how products are eligible for offers, ecommerce businesses can also create discount codes through Seller Central, Amazon’s third-party management portal. They can then promote the code on social media and via email.
This eliminates the coupon fee; However, consumers need to take an extra step to redeem the code, Evans said. Additionally, to achieve a tangible sales advantage, sellers need “an established and engaged following on social media,” Mattar said. You can also work with an influencer who has a larger and more engaged following; It doesn’t have to be a celebrity. “Influencers can be expensive, but if you can accurately predict how big the increase in sales could be, you can benefit from working with an influencer,” Mattar said.
If you list items for sale, they won’t stand out on Prime Day
Markdowns can be a useful tool in a seller’s toolbox, but simply listing an item for sale probably won’t be enough to make a splash on Prime Day, Ching said. That’s because, unlike lightning deals or coupons, Amazon doesn’t have a dedicated link for sale items. “It only tracks people who are already looking for your product or are thinking about your product,” Ching said.
Also, your competitors are also offering discounts on Prime Day, so this might be a more profitable strategy for another time of year, especially if you’re consistently able to offer a price lower than your top competitors – given your margin allow it, Evans said.
Promotions need to be linked to a broader business strategy
The new invitation-only deals Amazon announced Wednesday appear to be a way to secure the best Prime Day deals ahead of time, Mattar said. Most of the invites he’s seen so far relate to Amazon-owned products, such as the $99 43-inch UHD TV.
“The invite feature makes sense for Amazon because it brings more traffic to their products ahead of Prime Day. If anything, this will make the weeks leading up to Prime Day just as busy as the actual days,” he wrote in an email.
On the other hand, he said it might work well for consumers who want to avoid the rush at the start of a lightning deal. “We know that Amazon’s own products will have some of the biggest discounts on Prime Day. So why not try to get in beforehand? The key is that not all requested invites are granted, so there is Prime for this first year.” “Customers should expect to visit the Amazon store even as Prime Day begins,” Mattar said.
Eventually, this concept will likely be rolled out to Amazon sellers, he said, and it will be a way to scale up Lightning Deals. “If someone sees your product and sees that they can request it at a discount, they do so and later get a chance to buy it at a discount. The downside is that it becomes more difficult to sell your products at the normal price.”
The new Amazon deal concepts underpin a fundamental point for everything e-commerce entrepreneurs do around Prime Day. Nothing a seller does on Prime Day or any other time of year should be done in a vacuum. “It always has to be part of a larger marketing strategy. Running a promotion aimlessly with no plans for what’s next is a missed opportunity,” Mattar said.
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