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  • Ridgeline Insights

Amazon Price Promotions: Strategies for Brand Success

Pricing is an important part of your overall Amazon brand strategy. Part of that is the consideration of promotions and discounts. Amazon offers a variety of price promotions and deal opportunities, but when should you really consider sacrificing margin for the sake of sales velocity?

  • It is getting more difficult to launch new products on Amazon and see immediate success. With the stronghold the top sellers have in most categories, it makes it hard to earn the sales velocity needed to move up the organic search rankings. Starting at a lower price during launch can increase velocity and improve the performance of your ads. As you start to earn reviews and move up in ranking you can gradually bring your price back up based on your goals. Brand new products without sales history may be limited in the types of promotions you can run, but you can always just drop your sale price to be more competitive early on.

  • Once in a while, you may end up in a position where you are overstocked with inventory at FBA and you’ll have to weigh out your options. You can pull the inventory or let the inventory age, but each of these can quickly rack up new expenses. We first recommend trying a price promotion, sale, or coupon, to try and entice customers to purchase. This way you can increase your sales and move out from underneath the inventory, while possibly seeing improvements in your product's visibility due to increased velocity.

  • Certain seasonal products can see very drastic spikes in demand that only last for 1-3 months. Think about a back-to-school selling season or an Easter holiday product. Both of these require you to maximize your sales in a short period or you may be left sitting on slow-moving inventory at the end of the season. Try running promotions ahead of the peak season to increase your sales and ranking so that you are positioned to be a top seller during the peak of the season, while now selling at full price.

  • Prime Day and Cyber Week have become highly competitive selling periods on Amazon, and not every brand is going to be able to run steep discounts, but that's okay. You are going to see increases in demand during these periods, so many brands will just hold prices and take advantage of the extra traffic with ads. If you want to play in these discount periods, focus on overstocked inventory or new products, and come up with a 20%+ discount to be relevant.

  • Lightning Deals are limited-time promotions that appear on Amazon's Today's Deals page and often in prominent positions on product detail pages. These deals create a sense of urgency and can drive a significant spike in sales. To run a Lightning Deal, you need to meet certain criteria set by Amazon, such as having good customer reviews and sufficient inventory. Our experience has proven that unless you have a highly sought-after product, you’re best off considering other options due to the cost and requirements for Lightning Deals.

  • Amazon allows you to create coupons for your products. These coupons appear on your product listing and can be clipped by shoppers. The discount is applied at checkout, encouraging customers to make a purchase. Coupons will also show up on certain ad types, usually improving the performance of the ad itself

  • Offering a percentage discount on your product's regular price is a straightforward yet effective promotion strategy. For example, you can offer 20% off your product's price for a limited time. You’ll need sales history to be able to display a percentage discount.

  • BOGO promotions encourage customers to purchase more by offering an additional product for free or at a reduced price when they buy one. This strategy can help increase the average order value. Only certain products are eligible, so this is less common but can be successful if the products are relevant together.

  • Create bundles by combining complementary products from your brand. Selling these bundles at a discounted price can attract customers looking for added value.

Remember that while promotions can drive short-term sales spikes, building a strong brand reputation, delivering quality products, and providing excellent customer service are equally important for long-term success on Amazon. When used strategically, price promotions can be a valuable asset in your e-commerce arsenal, helping you achieve your brand's goals on the world's largest online marketplace.



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