The ecommerce brand’s guide to Amazon Prime Day: Best practices & strategies

Optimize your Amazon Prime Day participation with our guide to Amazon best practices. Learn how to prepare, what to do, and how to measure success.
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Amazon Prime Day started in 2015 to celebrate Amazon’s 20th birthday and has quickly become a mainstay of the e-commerce marketing and promotion calendar with over $12 billion spent last Prime Day in October 2022. Our guide will help you prepare for the next Amazon Prime Day, what to do the day of, and how to measure success.

Commonly asked questions (and one question brands almost always forget to ask)

When speaking with Incremental customers and ecommerce leaders about Amazon Prime Day, we often hear the same questions.

1. Should we consider participating in Amazon Prime Day if we primarily sell lower-priced items?

Amazon Prime Day is no longer just for big-ticket items — more than half of Prime Day transactions in 2021 were less than $30. From a brand awareness perspective, the Prime Day event is a great opportunity to get your brand in front of new customers. Even if shoppers don’t visit Amazon with your brand’s products in mind, you can take advantage of the residual traffic.

2. I don’t see a Prime Day deal recommendation in my Amazon dashboard. How do I participate?

Sellers that have products eligible for Prime Day deals will see a recommendation from Amazon in their dashboard. Only recommended products can participate in ‘official’ Prime Day deals. However, you can still participate by creating your own coupon.

Due to the marketplace’s algorithm, deeply discounted items typically rank high in search results and ultimately get a spot on Amazon’s Deal page. As more people click on your discounted product, the higher the item will rank on Amazon’s Deal page. Keep in mind, you likely won’t see your product at the top of the Deal page — Amazon reserves those for official Prime Day deals.

3. Should I be spending more on advertising on Prime Day? And should I increase ad spend leading up to Prime Day?

If you have the budget, yes, increase ad spend during Prime Day.

Leading up to Prime Day, we’d recommend increasing funds on Amazon demand-side platform (DSP). Amazon DSP is a programmatic ad platform that allows you to buy ads and target new and existing customers on and off Amazon.

Increasing spend on Amazon DSP allows you to generate brand awareness, drive traffic to your product detail pages, and stay top of mind prior to Prime Day. “This will help drive the Flywheel effect and put you in a better position to get above the fold with both paid ads and organically ranked products on Prime Day,” said Haley Ulloa, co-founder, and EVP.

4. Do I have enough inventory?

This is the number one question brands forget to ask when prepping for Prime Day, according to Haley.

“We often ask brands, ‘Do you have enough inventory to support an aggressive ad strategy across various products in your catalog for Prime Day?’ Often the answer is, ‘Oh shoot, we should go check on that.’”

Note: Amazon requires Fulfillment by Amazon (FBA) sellers to send Prime Day inventory by a specific date every year. We recommend sending eight weeks of inventory for products you plan to promote or discount to ensure supply keeps up with Prime Day demand.

Two ways to approach Amazon Prime Day

We recommend two general approaches to Amazon Prime Day for ecommerce brands that sell low-ticket items.

The conservative approach to Prime Day

The conservative approach has one key component: Have enough budget to sustain your brand throughout the increase in traffic and cost per clicks (CPCs) on Prime Day. “You’ll see anywhere between 15% and 25% increases in CPCs on sponsored product ads,” said Haley.

Keep in mind that Amazon Prime Day isn’t a one-day event. Most ecommerce brands see drastic increases in traffic on Monday and Tuesday of Prime Day week and an increase in traffic on Wednesday and Thursday compared to a non-Prime Day week.

Because of the week-long increase in traffic and the likely increase in CPCs, Amazon encourages sellers to increase ad budgets for the entire week. Even if you don’t see an increase in CPCs during the week, the traffic alone could deplete your budget quicker than it would during a typical week.

The aggressive approach to Prime Day

Unlike the conservative approach, the aggressive approach factors in Prime Day discounts.

  • Implement 25% to 50% coupons. As we mentioned, not every Amazon seller receives recommendations for official Prime Day discounts. By adding your own 50% off discount, you’ll greatly improve your chances of making it on the Deal page - the second most visited page on Amazon.
  • Increase ad budget for sponsored products and Amazon DSP. We recommend increasing your ad budget as much as five times your average amount to capitalize on the increase in traffic.
  • Increase bid amounts. We recommend increasing bids as high as 25% to 35% to stay competitive and ensure ads remain above the fold. Above the fold is anything a customer can see on the page without having to scroll.
  • Focus on high-converting products for two reasons: One, you don’t want to waste ad budget on items that don’t historically convert. Two, you want to avoid additional storage fees for inventory that didn’t get sold.

In recent years, we’ve seen more brands choose the aggressive approach for Prime Day to capture Prime Day shoppers seeking discounted everyday household items sold in bulk or variety packs.

You might be wondering, “How much should I factor in margins when choosing which products to discount on Prime Day?” If profitability isn’t a priority, then only look at how well the product converts. If you’re factoring in profitability, focus on products with the healthiest margins and high conversion rates.

How to prepare for Amazon Prime Day

As we head into one of the biggest shopping events of the year, here are our top tips to prepare.

  1. Identify which products will receive discounts on Prime Day.
  2. Determine how much you’ll increase your ad budget and bids on Amazon.
  3. If you’re an FBA seller, determine how much inventory you need to send to Amazon before the deadline.
  4. If you’re already buying ads on Amazon DSP, increase your budget to drive more traffic to your product detail pages.
  5. A week before Prime Day, leverage influencers and increase the number of paid and organic posts on your Facebook and Instagram pages. Craft the messaging around your Amazon deals and discounts to generate hype for the event.

Top metrics to watch during the week of Prime Day

Even the best plans can go awry — your competition on Amazon may bid higher than you expect, or you’re not moving as many units as you predicted.

During the Prime Day event, we recommend checking your data at least every couple of hours so you can quickly pivot tactics if needed.

Here are the top metrics to watch during Prime Day:

  • Ad ranking: If your ads are not ranking as high as they historically did, your bid may be too low.
  • Ad budget: Check how your budget is pacing throughout the day to ensure you don’t cap out before peak shopping times — between 10am-11am and 8pm-9pm (and keep in mind that west coast peak shopping times will be three hours behind the east coast).
  • CPC on campaigns and top keywords: CPC indicates how competitive the landscape is (the higher the CPC, the more competitive) and also helps you determine if you have enough budget to sustain your promotions.
  • Top keywords: Did you bid on the right keywords, and are you ranking the same for keywords as you did historically?
  • Impressions: This will give you an idea of what your share of voice is during the event and if your organically ranked and sponsored products are above the fold.
  • Sales: The number of sales is a good indicator of how well your Amazon Prime Day strategy is driving top-line growth.
  • Units moved: Do you have enough inventory to keep up with demand? Or is demand not as high as you predicted?
  • Average order value (AOV) and average items per order: Are shoppers spending more and purchasing more items compared to non-Prime Days?

If you’re responsible for tracking Prime Day metrics and performance, we recommend having a direct line to decision-makers and the people that control the budget. “If you’re nearing 1pm ET on Prime Day and your budget is about to cap out, you need to be able to quickly contact the decision maker to approve the additional budget — or risk losing out on sales,” said Haley.

Some decision-makers want to see metrics such as CPC, return on ad spend (ROAS), and growth rate before approving the additional budget. If your Amazon seller account is integrated into Incremental, you can automatically track and collect data in real-time — saving you time manually calculating key metrics.

How to measure your brand’s Amazon Prime Day success after the event

Once the Prime Day shopping event is over, there are several ways to measure success and to use Prime Day insights to optimize your everyday Amazon selling strategy.

  • Overall sales growth relative to increase in spend. For example, did a 2x increase in ad budget lead to a 5x increase in sales compared to a non-Prime Day
  • Were margins compromised? The combination of deep discounts and increase in ad spend will likely result in a decrease in margins.
  • Incremental lift over time. In theory, by increasing ad spend, you drive more visibility, more page views, and ultimately conversions. Did this happen?
  • Click-through rate (CTR) for paid ads. Improving your CTRs on Prime Day can have long-term positive benefits. By increasing your CTRs, you can typically bid less on ads and gain efficiencies in your CPCs.
  • CPCs and CTRs at an item level. This helps you determine which products to promote after Prime Day.
  • Organic and paid ranking. Did you increase your SOV during the event?
  • AOV and average items per order. High AOV and average items per order could signal shoppers bought products in bulk. As a result, you may see a dip in repeat purchases and retention rate over the next several months. In this scenario, consider how this will impact your retention marketing efforts and how much to invest in customer acquisition.

Final thoughts

Amazon Prime Day is no longer only for TVs, blenders, and headphones. Low-ticket items often see a boost in sales simply because of the increase in overall traffic to Amazon.

At a minimum, plan to increase your ad budget, but also consider offering deep discounts on high-converting items. Most importantly, make sure you have the inventory to support your Prime Day game plan.

In preparation for the shopping event on Amazon or elsewhere, consider a neutral reporting platform like Incremental that will automatically track key Amazon metrics throughout Prime Day and help you measure lift and ultimately success after the event. Talk to us today about how we can help.


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