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With Amazon announcing Wednesday that its 2023 Prime Day sales event will take place July 11-12, now is a particularly good opportunity for sellers to ramp up promotions.
This year, there are some new deal offerings that Amazon is trying out, 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 Amazon Stocks and shipping infrastructure.
Every year, there are several planning steps sellers should take before Prime Day, including reviewing the sales strategies they will use, from temporary deep discounts called lightning deals to coupons and social media promo codes. The options sellers choose can depend on many factors, including their product, budget, social media following, and timing. This 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 all year long.
“The goal of any deal is to get more products into more hands because you want people to become loyal customers. If you can’t do that, you’re just wasting your money,” said Phil Masiello, managing director of digital marketing company CrunchGrowth.
Here’s how small businesses should think about promotions to drive sales on Prime Day and beyond:
The costs of selling on Amazon can reduce profits
The cost of selling on Amazon can be significant and varies depending on factors such as a merchant’s sales plan, product category, shipping strategy, and other variables. E-commerce entrepreneurs can take advantage The online calculator from Amazon Seller Central 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.
Often it can 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 take that into account when making 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.”
You can learn a lot from Lightning Deals
Lightning deals are available exclusively to Prime members on Prime Day, but this type of promotion may be offered more widely at other times during the year. While it’s likely too late to approve a Lightning Deal in time for this year’s Prime Day event, sellers should think ahead about 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 because they are only available for a short time. Customers can view available deals by clicking the “Today’s Deals” or “Prime Day” link on the Amazon homepage. But there are also disadvantages. Sellers pay a non-refundable fee per store, which can range from $150 to $500 per store depending on the time of year and day of the store, 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 how to qualify products for offers is available on Amazon.
Before deciding to offer a lightning deal, sellers should try to understand how competitors’ 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 uncover this type of information, and prices can range from $50 to $1,000 per month, depending on factors related to data, sources, tool features, 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 are built directly into Amazon and use precise data.
And timing is important. For Prime Day, sellers on Lightning Deals should focus on products that people want all year long, 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.
Vouchers can increase sales just as much as lightning offers
Sellers could also offer their customers a coupon for a specific dollar amount or percentage. Customers can search for coupon offers, filter for them, or see the offer in a single product listing on the Amazon homepage.
“Any type of coupon or promotion on Prime Day generally results in a similar percentage increase in sales as a Lightning Deal,” Mattar said.
There is a cost to sellers – a 60 cent fee every 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 one to two days to approve a voucher. “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 qualify for offers, e-commerce companies can also create discount codes through Seller Central, Amazon’s management portal for third-party sellers. They can then promote the code on social media and email.
This eliminates the coupon fee; However, consumers must take an additional step to redeem the code, Evans said. To achieve a noticeable sales advantage, sellers also need “an established and engaged following on social media,” Mattar said. You can also work with an influencer who has a larger and engaged following; It doesn’t have to be a celebrity. “Influencers can be expensive, but if you can accurately predict what the increase in sales might be, you can benefit from working with an influencer,” Mattar said.
If you put items on sale, they won’t stand out on Prime Day
Discounts can be a useful tool in a seller’s toolbox, but simply offering an item for sale probably won’t be enough to generate buzz on Prime Day, Ching said. This is because – unlike lightning deals or vouchers – there is no special link for sales items on Amazon. “It only captures people who are already searching for your product or thinking about your product,” Ching said.
Plus, your competitors also offer discounts on Prime Day, so this may 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 – assuming your margin allows this, said Evans.
Promotions need to be linked to a broader business strategy
The new invite-only deals Amazon announced Wednesday appear to be a way to snag the best Prime Day deals in advance, Mattar said. Most of the invites he’s seen so far are for Amazon’s own products, such as the $99 43-inch UHD TV.
“The invitation feature makes sense for Amazon because it brings more traffic to their products before 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 could work well for consumers who want to avoid the rush at the start of a flash sale. “We know that Amazon’s own products will have some of the biggest discounts on Prime Day. So why not try to get started in advance? The key is that not all requested invitations will be granted, so there is Prime for this first year.” “Customers should expect to still stop by the Amazon store at the beginning of Prime Day,” said Mattar.
At some point, this concept will likely roll out to Amazon sellers, he said, and it will be a way to expand Lightning Deals. “If someone sees your product and sees that they can request it at a discount, they will do so and later get the chance to purchase it at a discount. The downside is that it makes it harder to sell your products at the normal price.”
The new Amazon deal concepts reinforce a fundamental point for everything e-commerce entrepreneurs do related to 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 without having plans for what comes next is a missed opportunity,” Mattar said.