Amazon Promotions: Make them work for your business

You can find the option to “Manage Promotions” under Inventory in Seller Central. Here you are able to create four different types of promotions. You can use more than one promotion at a time and you can select which products you want each promotion to apply to. Certain promotions will work better with certain products. The biggest thing to remember is to work out how the promotion will affect your margins and what sort of hit you are willing to take in exchange for building up your sales history.

Even if you have a great sales history and strong customer metrics there is one great use for Amazon Promotions. It’s the perfect way to clear your inventory of stale or slow moving stock. If you have some products that have been sitting in your inventory unsold for a year or more and you want to release some of that tied up cash, you can use a promotion to shift the stock. You might have to reduce your margin significantly or even take a small loss but if you need to get the money back out of your inventory quickly to reinvest it might be worth doing.

Free Delivery

The first promotion you can offer is free delivery. When a shopper sees an item for sale on Amazon they can often be put off by additional shipping costs. Especially if there is a competitor offering free shipping. Offering free delivery is a simple way to boost sales but there are a few things you need to look at. For small and light items the shipping costs are probably low and offering free shipping won’t lose you very much money, if your margin on the product is big enough to absorb your delivery cost it’s certainly worth doing. If, however, the product is large or heavy and your delivery cost is high, then it will have a much bigger impact on your overall profit to offer free delivery.

You need to look at what your competitors are doing. If you are winning the buy box, making great sales and offering the same shipping price as everybody else then adding a free delivery promotion probably won’t make a lot of difference. On the other hand if there are other sellers of the same product offering it at the same price and they are winning the buy box you might want to try offering free delivery to gain an advantage over your competitor.

Money Off

You can offer a percentage discount or absolute value discount on orders. You might decide to offer 10% off all orders over £20 or £5 off all orders over £30. You can choose what limits to set and this will depend on the sort of stock you have. If you sell high value items then you will need to offer a little more to make this seem attractive to buyers. This sort of promotion can encourage buyers to check through all of the stock you have available as they will want to make the most of the offer. Customers are more likely to buy multiple products from you to reach the threshold for the money off.

As with the free delivery you need to think about your margins and figure out how much you can afford to offer customers whilst still making a profit yourself. You can offer this promotion across all of your products or you can select a group of products, buy 5 DVDs and save 20% for example.

Buy One Get One Free

This is a particularly great promotion for items which customers will need to purchase again at some point such as lightbulbs or cosmetics. The customer knows they will need to buy the product again once this one is finished with so they will be more likely to buy your offering even if it costs a little bit more than just buying the one from your competitor.

This promotion is the most difficult to do without losing money and is probably best used for shifting old stock. This is particularly handy if you have stock which will be eligible for Amazon’s long term storage fee. Twice a year Amazon charges FBA customers a set rate for any stock which has been in the warehouse for longer than a year. A buy one get one free promotion is a quick way to clear this stock and even if you make very little profit or even a small loss, as long as it costs you less than the long term storage fee would have done it’s a great move.

External Benefits

This is a great way to get repeat customers you can offer promotions such as “spend £30 and receive a £5 discount off your next purchase” or you can offer loyalty points which will accumulate and can then be used as a voucher. This is the most difficult promotion to manage as you will need to keep track of what you’ve offered and who has been eligible for your benefits. If you offer some niche products where you see a lot of repeat customers already this is a great way to reward them and make sure they keep coming to you rather than looking at other options.

Amazon promotions are great but you need to make sure you are prepared before setting them live. Make sure you have done your maths and know what impact this could have on your margins, make sure you have enough stock to satisfy an influx of customers and also make sure you can handle the extra orders. If you are already struggle to get orders sent out on time then a promotion is not a good idea. Make sure you think about any restrictions you want to apply to the offer such as limiting discounts to one per customer.

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