It’s that time of the year again! With one of the year’s busiest and highest selling periods on the platform approaching soon, now is a crucial time to start prepping your businesses and put key strategies in place to make the most of this sales event.
Despite the pandemic pushing last year’s Prime Day to October (as against the usual July), the selling event was still an unprecedented success for third-party sellers. The event marked the two biggest sales days ever in Amazon’s Stores Worldwide, generating $3.5 billion and 3P sellers seeing an overall 60% year-over-year increase in global sales. Hence, with such a huge influx of shoppers on Amazon in the past years, this large scale sale event provides a huge opportunity for sellers to massively amplify their revenue potential.
In this blog, we address some of the most impactful factors to set you up for success in your planning for the Amazon Prime Day 2021:
With millions of shoppers searching through every nook and cranny of the marketplace for all kinds of products and deals, you will naturally witness an uptake in sales. Plan your inventory in line with how aggressively you plan to advertise on Prime Day. An expected modest bump would require a slight increase in inventory levels, whereas high involvement in bidding and price wars calls for a significant uptick in inventory position.
For the Prime Day 2020 event, multiple categories saw an upsurge in total sales growth. Though the Electronics category continued to top the list of biggest drivers on Amazon during the event, other categories like Clothing & Shoes, and also Grocery & Gourmet Foods witnessed huge gains over 2019. It becomes all the more crucial for sellers in these categories to strategically manage inventory for Prime Day.
Additionally, for products that see a significant increase in sales during Prime Day, we have observed improved organic rankings, and consequently a halo sales effect, even in the week following the sales event. It is important to take this into account while planning inventory.
Effective April 22, 2021, Amazon has changed the FBA restock limits to account-level, as against ASIN-level restock limits before. Earlier with ASIN-level limits, sellers could send limited quantities for each ASIN. However, with the updated limits for the account set at the storage-type level, sellers can plan their shipments better and redistribute the product mix as per their own sales projections.
Hence, while forecasting your account level sales for Prime Day, your current inventory holding, the inventory already in-transit and your revised account level limits will need to be analysed a lot more carefully than ever before. As Prime Day is fast approaching, below are some steps you can take to better optimize your inventory holding:
Take your customers from ‘want it’ to ‘got it’ by pricing your products competitively. Analyze historical pricing trends of competitors to understand the most lucrative price for the product category. This will act as a guiding force for your pricing and deals strategy during the shopping event. One of the best practices is to not make any pricing changes one month prior, as this is the time period when Amazon evaluates your lowest pricing for deal eligibility. Competitive pricing on this one day will help you get a significant sales velocity, the after-effects of which are seen even a month post the Prime Day. This is even more relevant to categories such as Electronics, Home Furnishing, Health, Beauty & Personal Care that witness price wars on Amazon.
Also, when planning your Amazon Day Pricing Strategy, we suggest you incorporate an SKU-by-SKU approach. When reviewing each SKU as a separate entity and comparing it against similar products from competitors, you will be able to make pricing strategy decisions for each product individually rather than a blanket price reduction across your entire catalogue. This will not only enable you to optimize prices based on the product’s sales velocity, but will also ensure that you take into account your target profitability at an SKU level. A good idea is to carefully review your sell-through during last year’s Prime Day (especially for your top sellers), and accordingly set the pricing and inventory levels.
There is a frenzy surrounding deals during massive sale events on Amazon. The platform offers an array of promotional tools that sellers can utilize to improve visibility and capitalize on the sizable surge in traffic. Lightning Deals, Deal of the Day, Prime Discounts, and Coupons can be used to entice bargain-hungry buyers. It is imperative that you meet the minimum requirement and submit deals on time.
While deciding on which promotion to offer, it is also important to study the usual purchase behaviour in your particular category, the ASP of your product, the historical conversion rates on your account from various types of promotions, and the kinds of discounts being offered by other closely competing sellers.
Additionally, your pricing, inventory and ranking must be considerably appealing as Amazon awards the best deal slots and placements to those products that are most lucrative to shoppers. So, unless you have a rock-solid strategy in place, increased visibility of your promotion is not guaranteed. We’ve observed upto 25% increase in the number of units sold across categories by deploying deals during Prime Day.
To combat imminent competition, it is critical that you revisit your ads strategy to drive more impressions. Consider bidding more aggressively on the most relevant keywords starting now to increase your organic ranking by Prime Day. Make use of dynamic bidding – up and down strategy for more likely conversions, and focus on top of search placement to get the right kind of visibility for your products.
Actively monitor your Ad Spend during the build-up period to Prime Day and of course, on the actual event days. Use Sponsored Brand ads to direct shoppers to a brand-centric environment. Work on your ad creatives to tell your brand story through the use of A+ Content and Amazon Stores. You can also design a Prime Day specific landing page and list tailored offerings that are found to be more popular on such days.
The idea is to plan for a full-funnel advertising strategy well in advance, so that you do not waste even a penny of your advertising budget on underperforming campaigns. In the run up to Prime Day, go for Display Ads to increase your visibility. Also, ensure that you deploy Sponsored Product/ Sponsored Display Ads targeting competitor ASINs (primarily the ones that are not offering very high discounts), so as to better your chances of conversion.
At the same time, stay on top of shopper trends and search behavior, to identify the intent of the buyer and target those keywords. Get creative and go beyond what you think your product is meant for. There is a wealth of resources you can use to get a pulse on what products have had an upward trend and projections for the near future.
We recommend launching new products at least 90 days prior to Prime Day. This would give you enough time to make listing improvements and price adjustments, so that those clicks turn into conversions on Prime Day. Additionally, Amazon advertising campaigns need time to acquire a good quality score. A three-month time period would aid in effectively directing your advertising efforts to increase sales. Since now is the right time to plan new launches for that extra boost on Prime Day, key factors that sellers must focus on are – choosing a feasible fulfillment method, planning inventory, conducting detailed keyword analysis and evaluating competitor pricing, and driving relevant traffic through paid advertising.
All in all, there is much to be done in preparation for Prime Day. To make the most out of this extravagant shopping event, it’s important to focus on winning factors and work towards a streamlined plan to magnify conversions. Prime Day may seem two months away, but this is the right time to start planning for it and stay ahead of your competition.
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