Customers on Amazon are always on the lookout for the best deals. Amazon offers a wide variety of deals (e.g. Today’s Deals, Lightning Deals, 7-Day Deals, etc.), but it’s up to you to take advantage of these opportunities and satisfy these deal-hungry buyers.
Lightning deals can be found under Today’s Deals and are limited in that:
– A customer can only purchase a single item that’s on a lighting deal discount.
– The offer lasts for a limited amount of time.
– There is a limited number of products.
So, what’s the use of a Lightning deal as a seller?
There’s a list of requirements the seller must meet in order for a product in their catalogue to be eligible including:
– Have a sales history in Amazon stores and at least a 3-star rating
– Include as many variations as possible
– Not a restricted product or offensive, embarrassing or inappropriate product
– Prime eligible in all regions
– In New Condition
Make sure to search if your product is eligible:
If you have a product that’s eligible you will be able to configure it according to some parameters:
– The discounted price (minimum 15% of the current price of the item)
– The quantity of the product (there is a minimum quantity that can vary based on the product in question)
– The time slot in which the lightning deal is to take place in (at any point in time there is a choice you can make in which of the upcoming weeks your deal is to run in).
You’ll have to pay about $150 (sometimes more or less) to be included in Lightning deals.
Understand that the only thing Amazon guarantees is that your product will be displayed on the deals page for a 4-12 hour period within the time slot you’ve chosen. If the deal runs and you don’t meet your ideal sales, you cannot ask for a refund.
Lightning deals aren’t just listed beneath Today’s Deals, they will show up on the first page of organic searches as well.
The long-term benefit of the lightning deal
Arguably, the even greater benefit of lighting deals is the fact that wherever your listing is displayed as a search result you will find it with a “limited time offer” badge, even if it’s a sponsored ad. This is where the actual long term benefit comes from. This is how you can potentially raise your organic rankings in the long term. This badge is a signal to all the potential customers that if they had any desire to buy it, now would be the time. The badge makes your product stand out, and it increases the likelihood of it resulting in a sale. The idea is that once the lightning deal is over, you have come out the other end with higher organic ranking than you had to begin with and that hopefully that would result in a higher sales volume on a regular basis.
In August 2019, Amazon introduced a new type of deal, a 7-day deal. The process is similar to what you’d go through for the Lightning Deals. But make sure to check if your product is eligible … you may qualify for one deal but not the other. While the requirements are the same the major difference is that you may need to have more stock in inventory.
The good thing about 7-day deals is that amazon re-evaluates your items for eligibility on a weekly basis, so keep checking to see if any of your products qualify—especially after you replenish your inventory!
Deal of the Day
Total costs of running a deal:
Deals are not an option to be taken lightly, there can be some risk involved. You’re basically making a gamble. Here are some of the costs that come with running a deal:
The Amazon fees for running the deal – All Amazon deals come at a price. The fee varies based on the type of product or the time of the year, but you should anticipate it to be in the range of $100.
The cost of selling at lower price – You have to be comfortable with sacrificing virtually half of your profits if it means increasing your sales volume by over 50% in that period. But this isn’t guaranteed. Make sure you evaluate the % discount and how much you can make back.
The cost of PPC – When running a deal, it’s wise to be aggressive across the board, not just with select keywords.
The benefits of running a deal:
Higher organic ranking – This is the main reason to run a lightning deal! With a discount that’s alluring enough on a well-indexed product, you have a chance of establishing a higher organic ranking in the long run. Just by moving your listing up to page 1 of search result from page 2 on a handful of relevant keywords can make a truly significant permanent change in your sales volume.
Higher BSR – Sellers might think that BSR isn’t as important as organic ranking. However, there are some cases where it’s even more important than organic ranking. If a listing is in the top 100 sellers of their specific subcategory or their department as a whole, they will be displayed on the top seller page for that subcategory or department. Much like the subcategory of “selfie sticks and cell phone tripods” we can see here:
Besides that additional exposure, much like the all present “limited time deal” badge that will follow your listing everywhere during the deal, you might even get the “best seller” badge.
If your BSR ranks you close to top 100, it might be a great time to set up a deal and reap that one amazing benefit along with all the others.
Having that badge can make all the difference to your long term sales velocity. Keep in mind that the BSR is updated hourly and that if you manage to get into the top 100 it might be wise to double down and possibly run another deal right after or a coupon just to cement your position. The same logic applies if you see your BSR dropping and you might be fearing of losing your bestseller badge, running a deal is a great way to protect it.
Brand recognition and return customers – A positive of being featured on a deals page is that customers will gravitate to the page without having a specific product in mind. This gives you the chance to reach all new kinds of customers! Moreover, the high visibility can result in customers saving your product or recommending the deal to friends—once again, the long-term investment.
So, here’s what we learned about deals:
They are high-risk, high-reward. Make sure your business is in the right position to take the leap with Amazon deals—you have the money to invest and the inventory to keep up. The key in taking advantage of deals on Amazon is all about timing and experimentation.
Perfect timing may be when you’re on the cusp of reaching the top 100 in your subcategory, or when you have a large shipment coming in. When it comes to experimenting, keep in mind that you can adjust the amount you wish to discount, that way you don’t have to commit too much of your inventory. Running a small percentage off-discount on the smallest allowed amount of inventory can give you a better idea of what you can expect if you scale it up.
Running deals on Amazon are unpredictable, but they can result in high profit and high exposure. The key is that you know your product and the awareness of your position within that category, as well as the broader market.
In the end, success doesn’t come if you don’t take risks!