Prime Day Early Access – as the Seattle-based behemoth dubbed its latest festivities – happens on October 11th and 12th. And the 48-hour promotion will be open to all 200m+ Prime members.
Here’s what you (as an Amazon seller) need to know about the event.
(Please, hold all comments about how blasphemous holiday shopping before Halloween is until the end.)
Bloomberg reports that Prime Day Early Access intends “to boost sales among cost-conscious consumers who are expected to start their holiday shopping even earlier this year.”
This aligns with Salesforce’s findings that 37% of Americans will start Christmas shopping in October to space out their gifting expenses.
Needless to say, most retailers didn’t plan October Christmas promotions. So, Amazon is betting that Early Access will give its sellers 1st move advantage.
And if preceding Prime Days are any indicator, you can expect this event to be a big one. During July’s Prime Day, sales reached ~$12B (up 8.5% YoY).
Plus, Prime members saved $1.7B+ throughout the promotion. So, we’ll likely see consumers watering at the mouth as Amazon ramps up marketing for this event.
Not all Amazon sellers are as jolly over Prime Day Early Access. Namely, those feeling the impacts of:
Take brands that are currently understocked, for instance. “They want to maximize their sales output without running out of stock at any point during the holiday season,” Ryan Moffet, director of ecommerce at Pattern, told Modern Retail.
But from an inventory standpoint, lots of retailers are understocked. And the tough-love truth is, at this point, you likely can’t order more stock to arrive before Christmas. So, you’re stuck with what you’ve got (incoming purchase orders included).
And if you run the same campaign for Early Access as Black Friday and sell out? Well, you probably just accelerated your revenue by getting consumers to purchase sooner. The net effect is negligible.
With that in mind, how can you capitalize on Amazon’s Early Access event? Well, it depends on what inventory challenge you face.
If you’re pretty much guaranteed to stock out this holiday season, the name of the game is maximizing profits.
Sure, you could run your Black Friday deal during Early Access (like a soft launch). But you’ll not only accelerate your stockout but likely limit how much money you make.
Instead, try giving shallower discounts during Early Access. For instance, were you planning on offering 30% off for BFCM? Then, maybe drop your price tags by only 10% for the Amazon event.
Why? A few reasons:
But what if you really don’t want to sell out too early in the holiday season? We don’t blame you – try prioritizing your inventory. Meaning, limit how many units are available for Early Access versus BFCM, depending on each channel’s profitability.
Not only will this keep you in stock longer, but the quota could add incentive if someone’s still on the fence.
To prioritize your holiday inventory, consider:
👉 Need help prioritizing your inventory? Reach out to the Cogsy team at firstname.lastname@example.org. We’ll show you how to run these calculations before Early Access (even if you don’t use our ops platform). That way, you can capitalize on this sales opportunity.
If you’re overstocked, the Early Access game changes slightly. While you’ll still work on maximizing profits (always), you’ll go about it by stopping your margins from bleeding out.
How? By using holiday promotions like Early Access to get back to optimal inventory levels.
You could, of course, still treat this holiday season like any other and move forward with your standard BFCM discount to increase demand. That will shed some of that excess.
But keep in mind: The longer inventory sits in storage, the more holding costs it racks up.
So, a better option is to offer slightly deeper discounts to preserve your long-term profitability. If items don’t sell in the next ~3 months, you’ll take them into the new year. There, they’ll likely turn to dead stock – at that point, you’ll be losing money even if that stock eventually sells.
To stop the bleeding, consider all the same factors as understocked brands (namely, available units, possible discounts, and channel-specific costs). Plus, the caveat of where your inventory levels should ideally be sitting.
🔥 Tip: Try Cogsy free for 14-days. With it, you can visualize how small changes to your Early Access and BFCM promotions will move your inventory. That way, you can run with the offer that best positions you to reach your revenue goal.
Then, use these figures to confirm that your planned BFCM promotion will be profitable. And calculate the maximum discount you could offer (with this maximum discount, you should be roughly breaking even).
Run your originally planned promotion during Early Access. If it does super well, feel free to run the same promotion on all your other channels later in the season.
But if the offer doesn’t move the needle, prepare to leverage that maximum discount during BFCM. Keep in mind that just because you’re breaking even on 1 SKU doesn’t mean you need to make nothing.
For instance, you could take a play out of Caraway’s playbook and bundle that item with more profitable products. Last Christmas, the home goods brands literally offered bundles on bundles to boost their inventory velocity.
Both strategies should absorb some of the losses incurred by your excess inventory by boosting your average order value (AOV) over the holiday season.
Amazon hasn’t said if they’ll host Prime Day Early Access annually… yet. They’re likely waiting to see how the debut event performs. So, retailers thinking about sitting it out shouldn’t operate under the assumption that they can “just participate next year.” Especially when you can leverage Amazon’s marketing budget to get first dibs on people’s holiday budgets.
The top performers at July 2022’s Prime Day event were necessities like clothing, pet products, and household essentials. However, that doesn’t necessarily mean those categories will lead the Early Access event as consumers switch to holiday spending habits.
Absolutely not. Only 37% of Americans plan to start holiday shopping in October. But a majority of consumers are becoming more cost-conscious with rising inflation. So, the remaining 67% planning to start their holiday shopping in November will likely snag the deals offered during Prime Day Early Access. Those shoppers will just be buying for themselves rather than others.