Amazon Flash Sale Strategy Effective Methods to Increase Sales Conversion Rate

Effective Amazon flash sale methods to boost sales conversion rate

As an Amazon seller, it is our daily focus to effectively develop marketing strategies to attract customers to place orders on Amazon. Participating in lightning deals on Amazon is a good way to increase conversion rates. This article will introduce:

• What are Amazon lightning deals?

• The advantages and disadvantages of Amazon lightning deals

• How to create Amazon lightning deals

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• Can lightning deals bring profits?

What Are Amazon Lightning Deals?

Amazon Lightning Deals can provide buyers with significant discounts on products sold on Amazon. The duration is usually 4-12 hours (determined by Amazon), or until stock runs out.

The Advantages and Disadvantages of Amazon Lightning Deals

Advantages

• Increased sales: Lightning Deals are an effective way to drive sales and increase product visibility. The time-limited nature of the deals creates a sense of urgency among buyers, which can lead to an increase in sales during the promotion period.

• Increased exposure: Products will be displayed on Amazon’s Deals page and search results, which can increase their visibility to potential shoppers who may not have discovered them otherwise.

• Increased number of reviews: A surge in sales generated through lightning deals can increase product reviews, which can help improve the product’s overall ranking and visibility on Amazon.

• Improved brand awareness: By showcasing your product as a lightning deal, you can help establish brand awareness among potential customers. If they have a positive experience with your product during the promotion period, they may be more likely to purchase from your brand in the future.

• Competitive advantage: Running lightning deals can give your product a competitive edge over similar products, especially if the deal offers a bigger discount than your competitors.

• Clearing inventory: If you have a large amount of inventory that needs to be cleared, lightning deals can help you achieve that. Even if you lose money on the cost, removing your inventory this way is still better than clearing it through Amazon’s liquidation program (which costs only $0.05 per item).

Cons

• Lower profit margin: Offering significant discounts through flash sales may lower your profit margins. It is important to weigh potential sales growth against potential profit loss before deciding to conduct a flash sale.

• Inventory management: Lightning Deals require sellers to have sufficient inventory on hand to fulfill the promised unit quantity. If you run out of stock before the promotion period, your deal will not go through and you will lose the deal fee.

• Increased competition: With thousands of sellers on Amazon, Lightning Deals can become a highly competitive space where sellers vie for shoppers’ attention. It may be difficult to generate significant sales during the promotion period if your product does not stand out in some way.

• Higher transaction fees: To conduct a flash sale, sellers must pay non-refundable deal fees. Typically, the deal fee for Lightning Deals is $150 per transaction, but during large sales events or holidays (such as Prime Day), the deal fee per transaction may be between $300 and $500.

• Scheduling issues: Although you can select a date range for your deal, sellers cannot control the exact date and time the deal runs. Your deal may be scheduled during peak shopping periods.

• Potential for poor sales: Conducting a flash sale does not guarantee a significant increase in sales for your product. If your deal performs poorly, you still have to pay the deal fee set by Amazon.

Despite the potential drawbacks, Amazon sellers should still consider flash sales as part of their overall marketing strategy. By carefully managing inventory levels and pricing, sellers can take advantage of the increased visibility and sales that these promotions can bring.

In order to maximize the advantage of flash sales, we recommend promoting the promotion through email marketing and social media to ensure that your previous customers or followers are aware of the promotion.

How to Create Amazon Flash Sales

1. Check Your Eligibility for Amazon Flash Sales

To participate in flash sales, you must have a professional seller account with an overall seller rating of at least 3.5 stars. In addition, you also need to meet:

• Have Amazon sales history and at least a 3-star rating.

• Meet Prime eligibility in all regions.

• Follow Amazon’s pricing policy.

• Be in “sellable condition”.

• Include as many variants as possible.

• Comply with customer product review policies.

• Comply with transaction frequency policies.

2. Transaction Page in Seller Center

Even if your products and account are eligible to set up flash sales, it does not mean that they can be set up immediately in the seller center. To check, navigate to the “Transactions” page and click “Create New Transaction”.

3. Select Eligible Products

If you have eligible products, they will appear on this screen and you can continue to set up your transaction here.

4. Schedule Your Amazon Flash Sales Date

After selecting the product for which to set up Amazon flash sales, you need to choose the promotion date range. Amazon does not allow you to choose the actual date and time when the flash sales will appear.

Once your deal is approved, you can see the scheduled date and time of the deal in the “Deals” dashboard one week prior to the start of the deal.

5. Configure Your Lightning Deal

After setting the time frame, you will need to input the pricing of your deal and the number of units available.

Amazon requires a minimum discount of 15%, and will tell you the maximum deal price, the minimum discount you need to provide, and the minimum unit quantity you commit to selling.

If your product has variations, you can offer some or all of them.

6. Submit for Approval

If everything looks good, submit your deal for approval! You cannot influence the actual date and time of the deal, so your deal may be randomly scheduled during a time when there are not many online buyers.

Can Lightning Deals Be Profitable?

While lightning deals are a powerful marketing tool, they are not suitable for all sellers. Here are some ways to evaluate whether lightning deals are worth it:

Check Your Profit Margin

One important consideration for sellers is whether their profit margin can support offering steep discounts. Lightning deals require sellers to offer products at a steep discount, at least 15% off the regular price.

For some sellers, this may not be financially feasible, especially if they are already operating on thin profit margins. Use Amazon’s free FBA revenue calculator to determine if you can make a profit after each sale.

Let me show you an example using Jungle Creations’ Million Dollar Case Study product, the washable changing pad. For our 18″ x 24″ version, the regular price is $30.99. If we run a lightning deal, the maximum price we set is $28.04. Let’s see if we can still make a profit.

For this example, we assume that the landed cost per unit is $10.

After adding our flash sale price and the cost of goods sold, we can see that we can still make a profit on each sale after deducting all Amazon fees.

Since we have some profit margin, we can offer bigger discounts to increase our chances of selling more during this sale.

You should also determine your break-even point and see how many units you need to sell to cover the cost of the flash sale. For example, if the net profit after deducting the landed cost and Amazon fees is $10, and the flash sale is $150, you must sell at least 15 units to cover this cost. All units sold after this point will be profitable. In this example, if you sell an average of 20 products at a regular price per day, launching a flash sale may be worth it.

What type of product are you selling?

Another factor to consider is the type of product being offered. Some products, such as seasonal products or products with a short shelf life, may be more suitable for flash sales.

For example, sellers offering holiday-themed products may find that launching a flash sale during the holiday season generates significant sales and increases product awareness.

Marketing strategy

Sellers should also consider how flash sales fit into their overall marketing strategy. While flash sales can bring a surge in sales, it is important to ensure that the deal aligns with the seller’s overall brand and marketing goals. Sellers offering high-quality products may find that offering deep discounts through flash sales undermines the perceived value of their brand.

Amazon flash sales are an effective way for sellers to increase sales, enhance brand awareness, and increase product visibility on Amazon. However, it is important to weigh the pros and cons before deciding to launch a flash sale. We hope this article helps answer your questions about Amazon flash sales!

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