5 Essential Tips to Help Sellers Prepare for Amazon Prime Day
Amazon Prime Day is a global shopping event that will take place the second week of July. It is likely to be one of the biggest sales days of the year for a majority of sellers. There will be more deals on Prime Day than on Black Friday for a variety of products including video games, toys, electronics, sports equipment, clothing, and more.
Amazon’s self-created holiday began in 2015, but the event was harshly criticized by consumers and sellers for two primary reasons: First, some of the best deals got lost in the shuffle due to the high volume of promotions. Second, many sellers ran out of inventory within minutes.
In 2016, Amazon took some proactive steps to resolve these kinks—and they worked. The primary change was introducing tighter restrictions for selecting the sellers who were allowed to participate in Prime Day, and placing limitations on the items that they could promote. As a result, there was a 60-percent increase in worldwide orders compared to Prime Day in 2015, and total sales increased by an estimated 26 percent.
This year, Amazon has made its Prime Day seller-selection process even stricter by only allowing sellers to participate if they were directly invited to do so; however, even if you were not invited to participate in Prime Day promotions, you should expect more orders than usual and adjust your inventory levels appropriately.
In this article, we’ll examine five strategies to help you get more value out of Prime Day and provide useful advice for preparing your Amazon business for the biggest sales day of the year.
How to Find out If You Were Invited to Prime Day for Sellers
Amazon pre-selects the sellers and products that are eligible for Prime Day promotions. This exclusive “invite-only” restriction was introduced to make Prime Day more successful by ensuring that the best deals on popular products get optimum visibility.
You can find out if you were approved for a Lightning Deal by logging into Seller Central. Go to Reports > Amazon Selling Coach > Communication, and look for your invitation.
How to Prepare for Amazon Prime Day
On Prime Day 2016, there were more than 81 million visits on Amazon.com—up 5.6 percent compared to Prime Day 2015. That growth is expected to continue this year.
Amazon Prime Day for sellers is a rare opportunity to capitalize on an immense volume of consumer traffic. Whether you were invited to participate in Prime Day or you simply want to make your products visible to consumers who are scouting out the best deals, the following tips will help you maximize your profits:
1: Find out If You Have the Inventory and Margins to Offer “Lightning Deals”
In providing customers with the best possible deals, Amazon offers Lightning Deals which are limited-time promotions that run for up to 6 hours on the Amazon deals page. The promoted products must be Prime eligible. Amazon advertises Lightning Deals on the homepage and through social media and email marketing, so they typically receive a lot of traffic.
Only products that meet specific criteria can be offered as Lightning Deals on Prime Day—especially since participation in Prime Day for sellers is now exclusively invite-only—but it is important that you understand your obligations as a seller if you take the leap. Before we discuss those obligations, let’s examine a few benefits of offering a Lightning Deal:
- More Visibility: As previously mentioned, Lightning Deals are featured on Amazon’s homepage and advertised through social media and email marketing. They also appear on the “Deals” page of Amazon.com, which is one of the site’s most visited pages.
- Liquidate Overstocked Inventory: Lightning Deals are an opportunity to liquidate your overstocked or seasonal inventory.
- Improved Discoverability: Even after your Lightning Deal is over, the spike in traffic can drive additional customer discovery.
Now for the hard stuff—your obligations as a seller offering a Lightning Deal. First, you must cut the price of the promoted item by at least 20%. You must also have enough inventory to last the duration of the offer—a maximum of 6 hours. Finally, you will have to pay a fee between $300 and $500 per deal. Before you commit to offering a Lightning Deal, make sure you have the margins and stock to justify the promotion. Here is a helpful article that outlines the steps for creating a Lightning Deal.
2: Do a Test Run for Items You Intend to Promote as Lightning Deals
If you have the margins to support Lightning Deals, find out if the promotion will actually work before you stock up on inventory. In the weeks before Prime Day, offer Lightning Deals on the products that you intend to promote and see how they fare. You can only offer Lightning Deals on items within your inventory that Amazon recommends.
Pro Tip: “You can view items that are eligible for Lightning Deals under the “Advertising” tab in Seller Central.”
3: Stock up on Inventory
It’s difficult to predict how Prime Day will affect your sales volume if you haven’t participated in the event or experimented with Lightning Deals—and even if you have, the growth in Amazon Prime memberships over the past 12 months almost certainly means that this year’s Prime Day traffic will trump 2016.
A good rule of thumb is to stock up on inventory as you would for Q4 holiday sales. This is especially important for imported goods.
Pro Tip: “Be sure to factor in accurate lead times when creating an inventory management plan. For instance, if you think your lead time will be 15 days and it is actually 25, there’s a good chance that you will have a 10-day stockout, which can be a major blow to your sales.”
4: Consider Advertising Your Products on Amazon Prime Day
As Amazon floods with millions of customers who want to save money on their favorite products on Prime Day, you can expect the advertising cost of sale (ACOS) to increase; however, if you are familiar with Amazon’s dynamic advertising platform and you have the tools and tactics to create a sophisticated Sponsored Products campaign, you might be able to leverage Prime Day traffic to boost your discoverability and buyability cycles.
A compelling Sponsored Products advertisement will attract more sessions, clicks, and sales. This will ultimately improve your organic ranking on the Amazon SERP.
5: Optimize Your Product Description
You may have heard the saying “Content is King.” If you want to dominate the market and make sure your products stand out from the competition on Amazon, you need to optimize your product description.
Make sure you are using the right keywords to help Amazon users find your products. Your product descriptions should be concise yet informative. Remember to describe the features of your products and to include high-quality photos. Here is a helpful article about Amazon SEO.
Final Thoughts on Getting the Most Value out of Amazon Prime Day
Whether you intend to promote your products with Lightning Deals, design a sophisticated Sponsored Products campaign, or simply watch your organic traffic spike with the influx of customers, Prime Day offers plenty of opportunities to make your sales—and profits—grow. You can get more value out of Amazon Prime Day by carefully managing your inventory, testing the waters with Lightning Deals, and preparing your in-house systems and team for a profound—and certainly welcome—increase in orders.