Discount it and they’ll come? Not exactly.
2021’s Prime Day sale event promises a major influx of customers and sales – just like every year.
But this isn’t every year. More competition, FBA restrictions, and sky-high CPCs are throwing confident sellers a curveball.
Teikametric’s Director of Insights Andrew Waber looked back on real data from previous Prime Days to strategize best practices for 2021 sellers.
The good news? There’s still plenty of money to be made this year.
The bad news? You’ll need to spend time, money, and effort to get it.
The current state of the Amazon marketplace
What’s changed since 2019? Amazon sellers face more competition and restrictions than ever.
But bigger can be better, especially since the rise in seller volumes is outpaced by the increase in Amazon customers.
Luckily for smart sellers, there are new ways to edge out the competition.
“Advanced targeting options on Amazon have broadened your ability to much more comprehensively target, either competitor products or even your own products as a defense tactic. Those have gotten much more advanced,” explained Andrew. “These targeting options can really, really be a help when it comes to just growing your business, capturing market share.”
A rising tide lifts all prices
Prime Day is a cycle of increased rates: for traffic, sales, and CPC costs.
As traffic jumps in anticipation of good deals, sales increase over every category – and so does the cost of competition.
“By the same token, there is increased competition, right? More users are coming in, but CPC is going up because you have even more sellers that are advertising, that are pushing advertising budgets in. And that actually makes CPCs outpace the increase in traffic with some exceptions,” said Andrew.
The trick is taking advantage of increased sales while successfully navigating higher CPC and tougher competition.
Double-down on your bidding budget
How do you play the CPC game during Prime Day? Don’t be afraid to put your foot on the gas.
With the increased conversion volume, you can quickly run out of budget for high-performing keywords. Once you’re on empty, you’ve opened a place for your competitor to swoop in and sell.
“So you want to double down if you possibly can, whether it’s uncapped budgets, whether it’s even increasing your bid to get more aggressive. What do you do if you see that conversion volume be very consistent, and that conversion rate remaining steady or even increasing? Your CPCs could be going up, but if you’re seeing those other rates rise, keep your foot on the gas,” advised Andrew.
Prime Day bidding is not for the lazy. With so much happening – and plenty of cash on the line – sellers need to keep their fingers on their sales pulse to keep the advantage.
“You have to be willing to adjust. Whether that’s budgetary, whether it’s bids. Just be prepared. This is not a holiday, you can’t always sit on your hands and think everything’s going to convert just cause there’s a lot of activity, there are a lot of things that you need to be on top of,” Andrew cautioned.
Don’t force the discount
The biggest question every Prime Day: do I have to discount my product to get in on the party?
Andrew doesn’t think so.
In general, prices are going to be slashed across the site – especially in audience-drawing categories like electronics.
With so many targeting factors, increased traffic gives every seller higher sales opportunities, even at full-price.
Surprisingly, data shows that most sellers don’t discount at all. Some even raise their prices.
“40% of them actually increased the price versus the prior four weeks on a daily average. And when combining those increases and products with no change, that totaled a majority of products studied. You have a good percentage of folks that dropped their prices during Prime Day. But, keep in mind, this is not across the board. You do not have to drop your prices to have a great Prime Day. Not everyone is doing it,” Andrew said.
Should you launch a product on Prime Day?
If you have a new product, it can be a mixed blessing to launch it on Prime Day.
“The good thing about launching a product on Prime Day is you can get the volume necessary to really give you a leg up as you go into the rest of the year because the volume you’ll get will tell Amazon, ‘Oh wow. This product does convert for relevant keywords and we want to rank it higher organically,” Andrew said.
On the downside, Prime Day advertising is costlier than the rest of the year. And advertising is a non-negotiable cost of launching a product on Amazon.
Andrew advises making the calculations according to your budget capacity and willingness to bid strategically during the busy sales event.
Bulk up your advertising budget
Thinking about going offsite to advertise your Prime Day deals? Think carefully before spending the cash.
One good reason not to advertise elsewhere is simple: if your discount is ad-worthy, Amazon’s algorithm will already be prioritizing you for a wider reach.
Either way, you may need every dollar to pour into the Prime Day bidding war.
“You already have increased traffic coming to the site, and hopefully, increased conversion rates in aggregate,” explained Andrew. “Do you have the margin to spend additional dollars outside of Amazon to push people to Amazon? Is that worth it, or would you rather spend that money just on the promotion or advertising on Amazon directly?”
Choose keywords with care
Andrew’s bidding strategy is short and sweet.
Find the 3-5 keywords you think are realistically within reach. Focus your energy and budget on that selection, and spend your way to keyword dominance.
In a saturated market, the best strategy is to be laser-focused and be willing to spend what it takes.
“That’s going to give you the volume that will also have knock on effects later in the year. Because that conversion you can get now is going to tell Amazon’s A9 algorithm, ‘this product converts.’ And then you’ll have those great effects on your organic rank even after the sale event,” Andrew said.
Prime isn’t everything
Everyone loves two-day shipping, but it’s not the only reason to buy.
Even if you’re not a Prime seller, you can still win a top spot.
First, consider your best offers – from your steepest discounts to your best products. Then spend your way to the top as usual.
“The Prime badge means something, but it doesn’t mean everything. If you have a competitively priced product, if you’ve got what you feel is the highest quality with a nice listing, try to right-size your efforts. Trying to boil the ocean, especially when you don’t have Prime availability for your grocery items, is going to be difficult,” said Andrew.
As long as your listing is appealing to users, you may be able to offset the obstacles of longer shipping and non-Prime distrust.
While you prepare for this year’s Amazon Prime event, don’t be afraid to think big. For sellers with a strategy, it’s one of the best opportunities to outshine the competition and make an impact that you’ll feel long after Prime Day ends.
- Download our FREE Amazon Prime Day Report 2020
- Check out our Amazon Prime Day 2019 Recap
- Download our FREE Report on Amazon’s Big Style Sale