Amazon Prime Day - Online Shopping Event That Will Have a Long-term Impact on Your Products

Published on 29.05.2019

What is Amazon Prime Day?

This year Amazon is once again hosting one of the highest-turnover days of e-commerce: Prime Day. Since Prime Day was first launched in July 2015 to celebrate Amazon's 20th birthday, Amazon has been celebrating Prime Day every year with great advertising expenditure. Currently, thirteen countries participate in Prime Day including Germany, UK, France, Italy and Spain. Not only the sales, but also the number of visitors skyrocket on that day: Black Friday and Cyber Monday add up neither the user nor the turnover figures, related to Amazon.

Amazon Prime customers are the only ones to enjoy the discount fiasco. Around 40% of the lightning deals offered are posted directly by the manufacturer or retailer. Interestingly enough, the primary goal of Prime Day for Amazon itself is not sales, but the promotion of Amazon Prime memberships. After Prime Day had a duration of 24 hours in the beginning, the duration was increased to 36 hours in 2018. Therefore, this year we expect that customers will be able to hunt at least 36 hours of bargains.

There is no official date announced yet for Prime Day, but based on previous years it can be expected to be around mid-July.

 

Why is it important for sellers and vendors?

The main two reasons why it is important for both vendors and sellers are brand awareness and sales traffic. More than 100 million products were sold worldwide on this day in 2018 and an estimated turnover of 3.4 billion was achieved. Even if margins are smaller due to discounts, the larger number of sales can lead to a high overall profit. An increase in the number of purchases will also increase the number of product reviews which will have a great impact on the product sales in the long-term.

Another factor is the ability to build brand awareness by highlighting the brand and products. In addition, the Halo effect should be mentioned, which invalidates the possible criticism of shifted sales. Gaining more traffic on the product detail page and increasing historical sales data will improve the organic ranking of the product in the overall Amazon search results. Therefore, Prime day will have a huge impact on long-term performance of the promoted products.  

Furthermore, if a brand decides not to participate in Prime Day and doesn’t invest in deals for their customers - their competitors will. Once the competitors participate in PRIME day and offer great deals for their customers, these brands will most likely have a better organic product positioning afterwards due to sales traffic and increasing number of reviews.

 

Which Promotion Types are available?

Best Deals

Best deals are a price discount starting from 15% and are often featured on Amazon’s deals page (not guaranteed though). The minimum discount for Best deals can increase for Prime Day, Black Friday and Cyber Monday promotions. Best deals is a great way to offer discounts to customers which increases traffic and conversion rates for your listings. Often times products with best deals discounts get a higher organic ranking in the overall search results. Best deals run up to two weeks.

Best deals are available only for vendors and can be applied on vendor central.

  • Requirements for vendor:
    • Promotion must be applied for at least 4 weeks ahead
    • Recommended discount of 20-30% of Amazon’s retail price
    • Multiple products allowed

 

Lightning Deals

Lightning deals are temporary offers which usually last up to 6 hours and are quantitatively limited. Every lightning deal that is approved by Amazon costs a fee, which varies between each seller/vendor. As Amazon is making its own suggestions for sellers about which products to promote, it’s pretty hard to get non-recommended products approved by Amazon. An algorithm ultimately decides which submitted deal promises the highest sales potential.

The deadline for submitting Lightning Deals was on the May 17th in Europe, however even when you missed the deadline, there are other options to undertake during Prime Day.

  • Requirements for sellers: 
    • Professional seller account
    • At least one seller overall rating of 3.5 stars
    • At least 5 ratings received within a month
  • Requirements for Vendor: 
    • Minimum discount of 20% on the normal price
    • The offer must be at least 5% lower than the price of the last 28 days.
    • At least a 3-star rating with minimum 5 ratings for the product

 

Deal of the day

These are the flagship offers that are only accessible for vendors. These will be heavily promoted by Amazon and the products will be highlighted on the deals page. Deals of the day will run 24 hours and usually include high discounts on top brands and products. Promoted products will have the best positioning on Amazon website among all other promotions, however there is a strict requirement for the promoted products.

  • Requirements for vendor: 
    • Slightly unusual products/products that stand out
    • High brand awareness
    • Very competitive offers
    • At least 30% or 50€ off on the normal price
    • Less than 10% discount on the lowest price of the last 30 days
    • Lowest price within the last 365 days
    • Minimum product price is 10€
    • Minimum 4-star rating for the product
    • Products must be shipped via FBA or SFP
    • Promotions need to be submitted between 1.-30. April through an AVS contact

 

Vouchers

Vouchers are a great way to increase product visibility on vouchers landing page and ad visibility among product listings. They give maximum flexibility for sellers when making promotions for their products – the discount can be between 5%-80% and the requirements for the products are lower.

  • Requirements for vouchers:
    • Minimum 1-4 reviews and a product rating of at least 2.5-stars
    • At least 3-stars for more than 5 rating
    • Minimum price 5€
    • Sellers must have a rating of 3.5 or higher

Attention: Amazon says that it takes 6h to start a voucher. In fact, the approval of the vouchers can take up to two days, so it is better to prepare your promotions beforehand if you want to make sure to offer discounts on an exact time period.

Vouchers are only available in Germany, France and UK

 

 

Is Prime Day cannibalising organic sales?

The argument against participating in Prime Day could be that some products are being purchased when needed (household items like glues, detergents etc.) regardless of any discounts. Prime Day is creating a discount trap for promoted items where customers are going to wait with their purchases until the discounts.

However, Prime Day is only once a year and therefore its highly unlikely that customers will wait a whole year to purchase household goods. Prime Day is a great time to reach people who have not considered purchasing your brand’s products otherwise.

Additionally, sellers who are struggling to win the buybox - creating deals can help lower the product price, beat other competitors and win the buybox.

 

What’s next?

Amazon Prime Day can have a major impact on products. Whether its increasing brand awareness, boosting sales, generating historical sales data or boosting new products in your portfolio - it is definitely worth your while to take advantage of the shopping event. If you missed the deadline for lightning deals and find the Deal of the Day product criteria too strict - definitely focus on vouchers. Products with voucher discounts will have a special label on them which guarantees visibility. As customers are looking for good deals on that day - it’s a great way to grab their attention.

If you have any questions regarding different deals or you are still unsure how to make the most out of Prime Day - feel free to contact us and let’s discuss further!


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