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  • Ridgeline Insights

How To Approach Amazon Prime Day

Despite the drumroll leading up to the event, Amazon Prime Day may be overhyped depending on your brand and product offerings. Our experience leads us to understand why sales do not always hit expected numbers and how sellers can adjust to capitalize in smarter ways.

So why the risk of lackluster performance?

First, consumers are often just doing “curiosity searches” without the same purchase intent. Second, it’s difficult for your “deal” to stand out versus brands with specific promotional products -- typically the more relevant deals apply to electronics, similar to Black Friday. Third, the aggregate of the week’s sales often level out due to lower than average sales during days leading up to and following the Prime Day spike. Fourth, other brands and products are seeing the same spikes, preventing any long-term gains in improvement over your competition. Note that the bump in sales usually only results in a short-term BSR spike rather than a long-term bump in ranking or sales for your products over the competition. Finally, advertising costs increase drastically. Your average cost per click on Amazon has likely been rising over the years, and Amazon Prime Day is no exception. For example, last year the cost of advertising was rising faster than the increase in total Prime Day ad clicks YOY.

How can you avoid these pitfalls and make the most out of Prime Day?

Think right place, right time. Pivot to put yourself in the best spot to capture increased traffic. That means bid and budget advertising adjustments, focusing on the ad types that perform best for your products, updating your product pages and content, and setting a baseline prior to Prime Day to compare relevant factors such as traffic, conversions, and conversion rates.

Next, don’t overestimate a discount -- lowering prices can be good but isn't as crucial as you think. Instead, promote products that put you in a better inventory position -- if you’re overstocked on a product, this may be the time to drop the price. Also know that minimal price discounts do not help you stand out -- if your margin can’t handle 25%+ discounts, don’t bother with 5%. Hold price and you’ll still profit more.

Finally, align with your direct-to-consumer marketing. This allows you to define your brand positioning to your target audience and understand your customers. The better that relationship, the greater likelihood of success on Prime Day and beyond.



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