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Platform Parity: Running Promotions on Amazon

It’s a little scary to think about, but the end of the Holiday season is fast approaching. Browsing the front page of Amazon over the last month you'll have seen the transition from Black Friday and Cyber Monday to 12 Days of Deals, curated Holiday Gift Guides, and soon, last-minute deals.

Both Vendors and Sellers are often eager to participate in Amazon's promotional programs but it's not always clear which opportunities are available or how to effectively pursue and execute different promotion types--you may have even built your 1st- or 3rd-Party strategy around the promotional opportunities available to you.

Fortunately, the disparity between promotion types available in Vendor Central and Seller Central has shrunk considerably since 2015, with fewer and fewer gaps remaining as new features are announced throughout the year.

Background on Platforms

If you are new to selling on (or to) Amazon or want additional context on the types of promotions available, I’d suggest familiarizing yourself with our Amazon Promotion Glossary. Traditionally, Amazon reserved premium merchandising, marketing, and promotional tools for Vendor partners: businesses selling direct (wholesale) to Amazon through Vendor Central. Access to Amazon Marketing Services, the use of Vendor-Powered Coupons, Lightning Deals and Best Deals have been Vendor-exclusive opportunities from their respective launches.

This strategy allows Amazon to maintain power in the vendor relationship and continue to dictate the economic terms for products. Because promotions are always Vendor-funded, Amazon maintains item-level profitability, while the Vendor (and Amazon) see growth in unit volume and increased baseline performance from that point forward.

The next You may be asking “If Amazon is able to exercise this level of control over Vendors, why bother improving functionality in Seller Central?” The answer is simple: cash flow. With FBA and MFN, Amazon is able to offer products without tying up funds in inventory. In Seller Central, the Seller retains ownership of all inventory and Amazon's platform commission is only taken when a customer purchases the product.

Analysis of the Current Landscape

Promotion Type Seller Central Vendor Central Best Experience
Public Discount Code Yes Yes, Requires Approval Seller Central
Individual Discount Codes Yes No Seller Central
Price Discount Yes Yes, Requires Approval Seller Central
Multi-Buy (BXGY) Yes Yes, Requires Approval Seller Central
Lightning Deal Yes, Invite Only Yes, Requires Approval Vendor Central
Best Deal No Yes, Requires Approval Vendor Central
Deal of the Day Yes Yes, Requires Approval Vendor Central
Coupons Yes Yes Neither
Subscribe & Save Yes Yes Neither
Discount Codes

A popular choice for Sellers and Vendors: businesses can distribute redemption codes through social media or e-mail campaigns to drive traffic and sales. Seller Central offers additional functionality to create individual (unique-per-customer) discount codes to better control who is eligible to receive the offer (and limit financial exposure.)
Advantage: Seller Central

Price Discounts

Sellers have the benefit of adjusting advertised prices almost instantaneously and Amazon's commission is taken from the new sale price. In Vendor Central, because Amazon owns the inventory, you have almost no ability to influence Amazon's price in the first place, and all promotion submissions must be reviewed and approved by Amazon; funding is based on cost-per-unit and deducted from the wholesale price.
Advantage: Seller Central

Multi-Buy Discounts or BXGY

Sellers have a distinct advantage through the self-service promotion setup workflow. Where Vendors need to submit these promotions for approval, Sellers are able to set them up as little as four hours in advance. In addition to having full control over the setup process and the ability to execute these promotions much more quickly, Sellers are also able to better control the monetary exposure by having full control over the base or non-promotion price.
Advantage: Seller Central

Best Deals

Exclusive to Vendors, these Amazon-sponsored promotions are merchandised on top-trafficked pages (including the Amazon Deals Store) and provide a longer discount period relative to Lightning Deals or Deal of the Day.
Advantage: Vendor Central

Lightning Deals

Both platforms offer the use of Category-Specific Lightning Deals (CSLDs), but Seller Central has far less flexibility. The pricing expectations are consistent between the two platforms, but which products are eligible may not be. Sellers are dependent on Amazon's “Recommended Products” assortment, while Vendors can submit a deal proposal on any product in their assortment. Additionally, where Vendors are only responsible for funding the price discount, Sellers must absorb both the price discount and are subject to fees ranging from $150-$500 simply for the privilege of running the promotion.
Advantage: Vendor Central

Deal of the Day

Deal of the Day is Amazon's premier featured deal-type, promoted across the site and via e-mail. Qualifying for Deal of the Day can be challenging, particularly for high-traffic days and the minimum product rating, discount, and sales forecast will vary by product category. All submissions must be manually reviewed and approved by Amazon.
Advantage: Vendor Central

Coupons

Only just launched in Seller Central (Q4 2017), this marks a significant shift in on-site merchandising and functionality for Sellers. In addition to funding the customer-facing discount, Coupons also incur a "clip fee," which is currently being waived if the coupon is promoted through Product Display Ads.
Advantage: Neither

Subscribe & Save

This functionality is on even footing between both platforms.
Advantage: Neither

So Why Does the Shift in Promotional Parity Matter?

Improvements to Seller Central functionality allows Amazon to showcase a larger assortment of products to consumers and drive additional sales on the platform without tying up funds in retail-owned inventory. Sellers now have the ability to truly compete on the platform, offering the same customer experience as Amazon retail deals.

For businesses, the opportunity to adjust your fulfillment strategy to 3rd-Party selling and improve your profit margin is now more viable than ever. Looking at the economics of a promotion, Vendor Central puts the onus of funding a discount on the shoulders of the vendor. Since the brand owner is selling at a wholesale cost direct to Amazon, the discount is taken from that price which can easily lead to unprofitable situations. Similar to Vendor Central, Sellers also shoulder the burden of promotional pricing--however, Sellers are able to capture the full retail price (with Amazon's commission scaling back accordingly.)

With increased functionality and improved profit margin, Sellers are poised to benefit from increased awareness and conversion through a variety promotional opportunities while still executing the lowest-cost option.

So Many Options! Now What?

As the promotional opportunity gap between Seller Central and Vendor Central shrinks with each passing quarter, you need to focus on the economic implications of the promotions they’re running and determine if your current Amazon strategy is truly meeting the needs of your growing business.

If you haven't already considered leveraging Amazon's 3rd-Party platform and the incredible power of the FBA model, it may be time to re-evaluate your strategy.

--Anders

Anders Palmquist
Director of Client Experience
Have a question? Please reach out to us at info@getarmr.com

Amazon Promotions: An Overview

As a customer, you may already be aware that Amazon has an incredible range of promotion types. From four-hour Lightning Deals to Subscribe & Save discounts, there are dozens of options and vehicles for offering a discount.

Before we begin, let's talk about Amazon Supported Deals. Programs like Deal of the Day and Lightning Deals enjoy the benefit of additional Amazon-sponsored merchandising across the site. These deals are automatically included in Today's Deals and category-specific deals stores and are often included in daily deals email campaigns (this is only guaranteed for Deals of the Day, sorry folks).

Restricted Promotions are deals which have a barrier to redemption: in short, customers must complete an additional action in order to receive the advertised discount. This additional action may be entering a promotional code at checkout, purchasing a certain number of units, or purchasing a specific combination of products.

Price Discount

Also known as Temporary Price Reduction (TPR)

Deal Duration: Up to 30 days.
Lead Time: Seller Central: Less than 24 hours (promotion must start tomorrow). Vendor Central: 4 weeks.
Restrictions: Minimum 5% discount off current price.

Multi-Buy Deals

Also known as BOGO, BXGY, BNXG%, BNXG%Y

Restricted Promotion: Customers must purchase a specified number or combination of products to receive the advertised discount. The key differentiating factor of multi-buy promotions is that customers must qualify for the discount by adding Qualifying Products (see below) to their cart before the discount is applied to their order at checkout.

Buy One Get What? Qualifying vs. Benefit Product Sets
The Qualifying Set is the selection of ASINs customers must purchase to qualify for the promotion. The Benefit Set is the selection of ASINs that the qualifying discount (or benefit) applies to.

Example 1:
Buy 1 or more units of Products A or B to get 50% off Product C, Products A and B are the Qualifying Product Set and Product C is the Benefit Product Set. A customer would need to purchase A or B to get 50% off their purchase of C. Sounds simple, right? If a customer buys 2 units of A, they would qualify for 50% off 2 units of C.

Most of the time, the Qualifying and Benefit product sets are the same.

Example 2:
Buy 3 or more units of Products D, E, or F and get 25% off all three units at checkout. If a customer buys any combination of 3, 4, or 5 units of either D, E, or F they would receive 25% off the first 3 products, but would not receive a discount on the 4th or 5th. If they purchase 6 units across D, E, or F, they would receive 25% off all 6 products in their cart, etc.

Discount Types

Buy X Get Y Free
Buy 1 or more Product X and get 1 Product Y free.

Buy N Get % Off
Buy specified number (N) of products in Product Set X and receive a discount at checkout. Ex: Buy 3 Apples, Get 15% Off.

Buy X Get % Off Y
Buy specified number of Products in Product Set X to receive a discount on products in Product Set Y. Ex: Buy 2 Apples, Get 50% Off an Orange.

Deal Duration: Up to 30 days.
Lead Time: Seller Central: 24 hours. Vendor Central: 4 weeks.
Restrictions: Minimum 5% discount off current price.

Discount Codes

Also known as Promotional or Claim Codes

Restricted Promotion: Customers must enter the discount code at checkout to receive the advertised discount.

Combinability: All multi-buy promotions are combinable with non-claim code promotions. Additional combinability restrictions can be added at setup.

Deal Duration: Up to 30 days.
Lead Time: Seller Central: 4 hours. Vendor Central: Minimum 2 weeks.

Group Claim Codes

Group or public discount codes can be used by anyone can redeem to receive the advertised discount. Group codes can be shared or advertised on social media and other marketing channels to drive awareness and subsequent sales.

Visibility: Group codes are displayed on product detail pages and visible to all customers.
Restrictions: Minimum 5% discount off current price.

Individual Claim Codes

Individual claim codes are just what they sound like: each claim code can only be redeemed by a single customer.

Visibility: This promotion type is not (and should not be) advertised on or off Amazon.
Restrictions: Seller Central only. Minimum 5% discount off current price. Individual codes are not published and cannot be shared; Sellers are responsible for messaging customers and delivering their individual discount codes.

Social Media Promo Code

Social media promo codes allow Sellers to offer a percentage discount. A landing page is automatically created with the list of eligible products and promotion details; the landing page exclusively features seller-specific offers, so customers do not need to locate your offer in the Buy Box. The landing page can be shared on social media or marketing channels such as paid search to direct customers and promote sales. Customers can then add items to their cart directly from the landing page and the discount will be automatically applied.

Codes default to single-use only but can be configured to allow multiple redemptions per customer account. Codes can also be configured to apply to a single product or multiple products.

Visibility: Promotion is not messaged on product detail pages.
Restrictions: Seller Central only. Minimum 15% discount off current price.

Coupons

Also known as Vendor-Powered Coupons (VPC)

Coupon discount can be setup as either percentage or dollars off. The budget you set will be utilized as customers redeem your coupon. We will deactivate your coupon when your budget is fully utilized. Targeting is available: limit availability/discoverability to a customer segment of your choice.

Restricted Promotion: Customers must clip the coupon to redeem the offer.
Deal Duration: 1-90 days.
Lead Time: Minimum 4 weeks.
Visibility: Amazon-Supported Deal. Search result badging. Available for Product Display Advertising. Targeting can be used to limit visibility.
Restrictions: Seller Central: Seller account rating must be at 3.5 stars or higher; discount must be between 5%-80% off the lowest price in the last 30 days.

Deal of the Day

Premier featured deal on Amazon. Deal cannot be inventory restricted; inventory must be available to fill all customer orders placed during deal period.

Deal Duration: 24 hours.
Lead Time: Minimum 4 weeks.
Visibility: Amazon-Supported Deal (see above). Search result badging. Available for Product Display Advertising.
Restrictions: Product must have minimum 3.5-star rating. Must be lowest price in trailing 365 days; cannot be run within 30 days following a Lightning Deal.

Lightning Deals

Also known as Category Specific Lightning Deals (CSLDs).

A Lightning Deal is a time- and quantity-limited promotional offer. For Seller-driven promotions, Amazon assesses an additional fee to participate in this program.

Deal Duration: 4-6 hours.
Lead Time: Minimum 4 weeks
Visibility: Amazon-Supported Deal (see above). Search result badging.
Restrictions: Product must have a minimum 3-star rating. Must be lowest price in trailing 90 days; cannot be run within 30 days following a Lightning Deal. For Apparel products, at least 65% of variations must be included in the product set. Seller Central: Must be a Professional Seller. Products must be recommended by Amazon; Sellers cannot submit products that have not been recommended for promotion. Products must be Prime eligible.

Best Deals

Also known as Savings & Sales.

Deal Duration: Up to 14 days.
Lead Time: Minimum 4 weeks.
Visibility: Amazon-Supported Deal (see above).
Restrictions: Minimum 20% discount off current price.

Free Shipping

A limited-time, free shipping offer for a subset of products. This promotion does not impact the Buy Box price.

Deal Duration: Up to 60 days.
Lead Time: 24 hours.
Visibility: Detail page messaging.
Restrictions: Seller Central only.

Subscribe & Save (SnS)

Subscribe & Save allows customers to schedule regular deliveries of products they purchase repeatedly using a subscription model.

Subscribe & Save customers select the product, quantity, and frequency of delivery. A 5% discount is applied per subscription. If a customer receives products from 5 or more subscriptions in a given month, they'll receive 10% or 15% off each subscription, depending on the product category. Additional information eligible product categories.

Combinability: Subscribe & Save discounts are combinable with other promotional offers, including Lightning Deals. Any coupons or promotions also apply to your Subscribe & Save-enrolled products. For example, if you run a promotion offering a 20% discount on a product that is available through Subscribe & Save, that discount will be added to existing subscriptions and will result in a total discount greater than 20% for subscriptions.

Deal Duration: Ongoing.
Lead Time: 4 weeks.
Visibility: Subscription enrollment and discounted pricing are integrated into the Buy Box.
Restrictions: Products must have an in-stock ratio of at least 85% for the trailing 30 days to be eligible for enrollment. Seller Central:  Seller account must be active for at least 90 days to be eligible for enrollment and have a 4.7-star rating or higher. Vendor Central: None.

Business-to-Business Pricing (B2B)
Business Price

A discounted price available to Amazon Business customers regardless of the quantity purchased. As an Amazon Business seller, you can create a Business Price on any of your offers.

Quantity Discount

Tiered discounts available to Amazon Business customers for high-volume purchases. As an Amazon Business seller, you can specify tiers for quantity pricing on your offers.

Deal Duration: Ongoing.
Lead Time: 24 hours.
Visibility: Available exclusively to business customers.
Restrictions: Seller Central only.

Content 101: Product Titles

Product Titles (aka Item Name or Product Name) are like term papers: thoughtfully organized, focused on the topic at hand, concise, and informative.

Product titles should include essential product attributes. What do we mean by essential? Pretend that all of the product images on Amazon disappeared overnight. If customers only had the name of your product available, would they be able to make an informed buying decision? There are specific details you absolutely need to know before you place your order, right?

Let's look at an example: a sweater. Which brand is it? Is it for Women or Girls?  Is it a Small, Medium or Large? Is it Red or Blue? Does it have a particular style? Is it made from a specific material or fabric? "Sweater" definitely doesn't give us enough information. Even "ACME Sweater" doesn't come close! "ACME Women's Cashmere Turtleneck Sweater (Red, Small)" on the other hand, provides a succinct description of the product's key attributes.

It's important to remember that the Product Title is a catalog attribute and not a marketing vehicle: unless they're part of the product name, search terms and keywords should not be included. Going back to that sweater, details like "hand-woven on Mars," "dry clean only," and "perfect for layering" are relevant to customers--but they should be iterated in the bullet points or product description, not the Product Title.

Here are some basic guidelines for how to structure this content and which details should be included:

  • Keep it short: 80 characters or less is our rule of thumb
  • Begin with the brand name
  • The actual name of the product, the way it would be described in a sentence--no superlatives or slogans
  • Include variation or critical attribute information:
    • Model Number/Compatibility
    • Color
    • Size
    • Flavor
    • Material or fabric (i.e. Stainless Steel, Cashmere)
  • Include distinguishing or value-added features--would knowing this impact whether or not a customer decides to buy your product?
    • Waterproof
    • Organic
    • Solar-Powered
    • Remote-Controlled
  • Quantity (if applicable)
    • 3-Pack
    • 24-Count
  • Physical Dimensions (if your product or similar products come in multiple sizes, this is essential)
    • 16oz
    • A4 paper / 8.5x11 in

Content 101: Content Optimization

When it comes to e-commerce, the product details must be as compelling, informative, and thoughtfully crafted as the product's packaging. Your Amazon detail page should be designed and optimized for two unique audiences: future customers and Amazon's A9 Search Algorithm

Optimizing for Customers

Your product page is the e-commerce equivalent of your "shelf presence" and physical packaging. Because consumers don't have the ability to experience or inspect the product in person, you need to communicate all physical details through richly-written descriptive content and high-quality images. A+ and EBC also allow you to provide additional content and media to give customers a better understanding of your brand's origin story, why your product matters, and how your company or product differs from the competition.

Assume that the customer is utterly ignorant of both the product and the category or family of products it belongs to. To deliver the best possible customer experience, and ensure there is no confusion or misunderstanding once the product arrives at their door, it's essential to state exactly what the product is, its purpose and functionality, and precisely what customers can expect to find when they open the box. Does it include any accessories like a carrying case? Is there an essential accessory that is not included, like a charging cable or batteries? Are there any other products featured in the images or video that aren't included with their purchase?

Optimizing for A9: Amazon SEO

At a high level, A9 is the Amazon Search Algorithm that powers customer search within the Amazon ecosystem. Just like making sure your products are correctly categorized, it's imperative to optimize detail page content for A9 indexing. The first thing to keep in mind is that A9 doesn't index all of the detail page content; it only looks at the first 500 characters of the Product Title and Bullet Points and all priority keywords should be included in these attribute fields. How do you include all of these additional keywords without it looking like alphabet soup? Diversify your language. Instead of reusing the same words or phrases, use synonymous terms to maximize the indexable real estate.