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A Quick Guide To Amazon Promotions

Shoppers love a bargain, and Amazon shoppers are no different. That's why Amazon Promotions are so popular. Running a promotion on Amazon has proven to be a sure-fire way to attract new customers, boost conversions and increase sales. 

That said, are they right for you? And should you consider running promotions over the Holidays? Over the next two blog posts, we will cover the different types of Amazon Promotions for sellers and our top tips and strategies for picking the best promotions to run for your products in conjunction with your PPC.

This week we are going to start by providing a brief overview of Amazon promotions, how to use Amazon promotions including how to set them up, and the pros and cons of each type.

The Main Types of Amazon Promotions

1. Amazon Lightning Deal

Amazon Lightning Deals are a popular feature on Amazon. These time-sensitive promotional offers can be found throughout Amazon, and are available on the Deal of The Day page. 

Lightning Deals are enticing to Amazon customers because the products featured are constantly changing; the Deals only last for four to six hours.

Eligibility For Lightning Deals

Products must be considered eligible by Amazon for a Lightning Deal. The criteria for eligibility criteria has been subject to change but the main ones are:

  • Star rating: Products must have a 3+ star rating.
  • Fulfilment method: Products must be eligible for Prime via Fulfilment by Amazon (FBA) or Merchant-Fulfilled Prime (MFP).
  • Category: Some product categories are considered inappropriate by Amazon for Lightning Deals such as alcohol etc.

How To Create A Lightning Deal on Amazon

  1. In your Seller Central account, go to the Lightning Deals Dashboard to see if any of your products are eligible.
  2. If any of your products are eligible, go to the “Create” tab and select the product you want to submit.
  3. Here you can edit the price, quantity, schedule and more.
  4. Once submitted, you can check the status of your “application” and alter your product listing as needed.

Fees for Lightning Deals

The typical fee for an Amazon Lightning Deal is $150. The cost is higher during special sales events like Prime Day, Black Friday, Cyber Monday and during December on account of the Holidays because of the increase in traffic on Amazon’s site. 

Pro's and Cons of Lightning Deals At A Glance

Lightning Deals can be a great way to boost conversions and sales by enticing shoppers to purchase your product for a limited time discount. 

They can also be extremely effective for liquidating inventory or reducing inventory quickly as a way to avoid excess storage fees if you are overstocked.

However, because there is a fee associated with Lightning Deals, you'll need to consider if the cost of running a Deal is profitable for you.

2. Amazon Promotions

Creating an Amazon promotion is another way to get your products in front of more shoppers is through Amazon promotions. With an Amazon promotion, you can offer your products at a discount to increase sales.

Types of Amazon Promotions 

There are three main types of promotions:

  • Percentage off: The most common promotion, you specify the discount and choose whether to create claim codes for single-use (this limits each shopper to a single discounted purchase) or multi-use (a generic code like “SAVENOW20” that anyone can use). 
  • Free shipping: You can offer free shipping to customers who purchase a specific quantity of items or spend a certain dollar (or equivalent) amount.
  • Buy One Get One (BOGO): BOGO is another popular promotion strategy whereby customers get an item for free for every item they purchase.

How To Create A Promotion on Amazon

  1. In Seller Central, go into the “Advertising” menu and select "Promotions".
  2. On the Promotions page, choose the type of promotion you want to create.
  3. Follow the instructions on how to set the promotion up for your products. 

Pros and Cons of Amazon Promotions At A Glance

Promotions can be a great way to increase brand awareness and drive additional traffic to your products to boost sales. 

That said, it can be easy to make mistakes when setting up promotions which can result in losing a lot of inventory by giving away the products for free.

It's also very important that you calculate how much you can afford to invest in these promotions. Whichever type of promotion offer, your margins will be impacted. You can decide how much of an impact but you still want to be able to make a profit. albeit, a smaller one.

3. Amazon Coupons

Amazon coupons are visible in the search results, on product detail pages, and other places including Sponsored Product ads. Just like coupons from printed circulars, shoppers “clip” these coupons to apply them to their order.

Types of Coupons

There are two types of coupons:

  • Link coupons: Link coupons require shoppers to click on a specific link to get a discount added to their shopping cart for eligible items. These coupons are typically general and apply to all products in your store e.g. “$10 Off Your Order” or “$5 Off When You Spend $30.” 
  • Clip coupons: Clip coupons are used for specific products. Once clipped, they get added to the eligible item in the shopping cart. 

How To Create Amazon Coupons

  1. In your Seller Central account, go to the advertising tab and select “Coupons” from the drop-down menu.
  2. Click “Create your First Coupon” and select the product you want to create a coupon for. 
  3. Select a percentage or dollar discount. 
  4. Set your budget to cover the costs of the coupon which is made of the amount discounted plus the $0.60 coupon fee plus. Every time you sell an item, this budget will be deducted. Once your maximum budget reaches 0, your coupon will automatically be deactivated.
  5.  Schedule how long you want the coupon to last. This can range from 1 day to 3 months.

Pros and Cons of Using Coupons At A Glance

Coupons have been around for years and shoppers love them; few people turn their nose up at a bargain.

When shoppers see your product alongside your competitors in the search results, coupons can give you the edge to win their click. 

It’s a great way to bring in new customers, build brand awareness, and increase conversions for your business.

But as with the other types of promotions, coupons come at a cost to your business so you will need to take this cost into account to ensure it is viable.

Conclusion

Running a deal or coupon on Amazon has several benefits. They can help to improve the discoverability of your brand and products, boost conversion, increase sales and highlight your products in the shopping results. And at this time of year, they can drive increased traffic to events such as Black Friday and Cyber Monday.

The type of promotion you choose depends on your marketing goals and more importantly, your budget and profit margins. You need to know your numbers to ensure you still come out on top.

Next week, we'll dive deeper into these key considerations and how to ensure you get the most out of your Amazon Promotions over the Holidays.

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