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The Argument Against Amazon Prime Day
Written By
Chris Reebie
Prime Day is a juggernaut.

It carries a weight unlike anything in ecommerce. This past year, despite every circumstantial pitfall thrown its way, it still managed to be a roaring success for Amazon. Every year it seems to have grown in scope, importance and potential for Amazon, the key phrase there being “for Amazon.”

Success on Prime Day is almost a guarantee for Amazon. They’re going to see elevated visitor totals, elevated conversion rates, elevated revenue, etc. The same can be said for sellers on Amazon. They’ll see more interest in their products, more product detail page (PDP) views converting to sales, and more revenue than the average day.

But Amazon is the only party that will see a guaranteed increase in the all-important lever of profitability. Sellers might see heightened revenue, but they may not necessarily see profitability tied to those revenue totals improve.

In the end, Amazon is the only Prime Day participant guaranteed to receive a jolt to its bottom line. Which begs the question: Is Prime Day really all it’s cracked up to be?

What’s Working in Amazon’s Favor

Prime Day is Officially Flexible
Prime Day has historically occurred in July. In 2020, Amazon ran into issues meeting consumer demand in Q2 – throwing that timing for a loop. This, combined with a variety of other pandemic-related factors, led them to postpone Prime Day, pushing it to Q4. Despite the move, that iteration of Prime Day was Amazon’s most successful to date.

2021’s version – despite being moved once again to June – followed suit. Adobe estimated total Prime Day sales surpassing $11 billion, representing a 6.1% growth compared to 2020. Staggering numbers for an event that was born a mere six years ago.

But YoY growth aside, there’s no doubt the timing of the 2020 version of Prime Day eroded sales that were destined for holiday timeframe. The true value of Prime Day to Amazon is its position within the calendar year. It’s a made-up event positioned smack dab between the prior and upcoming holiday seasons.

The Hype Surrounding Prime Day
Creating a reason for consumers to spend mid-summer was a genius move. It gives the Amazon hype machine a chance to build up a frenzy of buying during an otherwise dormant shopping timeframe. One which the retail industry has forever been trying to figure out.

The funny thing about the past few Prime Days has been how little Amazon has needed to promote them. For example, their unwillingness to publicly confirm a date leading up to 2020’s event led to a flurry of speculation and media guesswork. It seemed there was a new “We Think Prime Day will Occur on [Insert Date Here]” storyline almost daily across an ever-rotating list of publications.

Amazon’s unwillingness to reveal details – in an era where people (and companies) are all-to-eager to share everything online – drove people wild. It was yet another genius move, letting the ambiguity drum up anticipation. Why commit to a date if everyone was constantly publishing content around how they had yet to commit to a date?

The Illusion of Prime Day
Regardless of when it occurs, Amazon has found a way to paint Prime Day as a can’t miss event for everyone. This has led sellers to view it with a siloed, self-involved lens. But what these individual sellers often don’t consider is that Prime Day isn’t solely their day. As noted, it’s an event for everyone.

Everyone is anticipating huge volume spikes and revenue gains. You and your competition come into Prime Day with the same mindset – to capitalize. But at what point does the need to capitalize outweigh the need to not get swept up in the moment?

Amazon tells sellers to expect an uptick in volume and willingness to convert from consumers. Thanks to this uptick, everyone should see revenue gains. What Sellers often see though is a different picture than the one painted by Amazon. Heavy competitive pressure (mostly via paid ads) tends to make capitalizing on Prime Day an uphill battle.

What’s Working Against Most Sellers

Reliance on Paid Ads
Prime Day is merchandised as the end-all, be-all online event. Designed to drive volume and efficiency for every seller willing to plan around it.

In the case of organic traffic, this is 100% true. Prior to Prime Day, sellers need to have their organic house in order. Product detail page (PDP) content, inventory levels, product catalog accuracy, pricing expectations and more need to fully optimized to capitalize on Prime Day. But in the last couple years, it’s become more and more apparent that relying on organic just won’t cut it.

The paid advertising model has taken Amazon by storm, and its fully designed to wreak havoc on Prime Day. For example, Amazon’s approach to paid ads not only allows conquesting; it encourages it. There is nothing keeping an advertiser from bidding heavily on terms and ASINS designed to steal share from the competition. This conquesting-first approach makes an event like Prime Day all-the-more difficult to navigate.

Bid Up or Else
Every advertiser is under the impression Prime Day is theirs for the taking. There’s volume to be had, and they need to capitalize or else. To accomplish this, they need to a) defend their turf and b) conquest the competition. How do sellers achieve both? By bidding up on their most viable terms, of course.

The below image shows a typical client spend and ROAS trend during Prime Day. Spend and volume increase while ROAS drops off. The reason is simple; both you and your competition are bidding more aggressively than normal, making it harder and harder to win an auction.

The expectation is that more consumers show up for Prime Day, which is true. But it’s not just you trying to capitalize on that volume. Your competition is there as well. And the rise in volume over the last few years has seemed to be offset by a rise in competition. So, while there are more conversion opportunities, there are also more sellers vying for those conversion opportunities.

Sellers expect to see huge volume gains during the two-day event and often do, thanks to spikes in consumer interest and purchase intent. But, the lulls in the days leading up to and following Prime Day can offset even the biggest of two-day gains. Prime Day’s results tend to resemble a bell curve when viewed over a longer period. The volume does not live in a vacuum, it ebbs and flows.

How to Navigate the Chaos

Approaching it with a steadier, less hype-driven mindset can help sellers in the long-run. As noted, there’s only one constant winner on Prime Day, but here are a few guideposts to ensure Amazon isn’t the only one capitalizing on the event:

Ensure Organic Presence
As discussed, getting your organic house in order is of the utmost importance. The best interaction a brand can have on Prime Day is one that doesn’t require them to pay for a click.

Deal in Deals
Take advantage of the tools Amazon provides for organic sales: Lightning Deals, Deal of the Day, Best Deal, etc. They’re well-oiled machines that require minimal investment (a nominal fee) to opt-in.

Use the Reps to Your Advantage
Within highly competitive categories, it might not hurt to go less aggressive during Prime Day and instead spread spend out over a less competitive timeframe when CPCs are more forgiving.

Be Strategic with Paid
Overstock, end-of-season, end of life, poor selling, etc., these products can all be pushed aggressively via Amazon Search and DSP before, during and after Prime Day. The products that typically sell are going to sell, but how you price and push the products that typically don’t sell can be a difference-maker.

Strive for Upsell / Basket Building
Speaking of products that typically sell, feel free to team them with products that typically don’t. Sub out or upsell whenever it makes sense via sponsored search in the moment of purchase. This will encourage basket building and higher revenue per conversion.

Be Wary of the Competition
Understand your competitors. Anticipating who will be spending alongside you is incredibly important. Some areas are worth reaching for during Prime Day, while others are not. Let the competition dive into the hype head-first.

Utilize a Profitability Cut-Off
Monitoring bidding/performance throughout the day in real-time is worth the effort. If you catch yourself pushing bids up to be competitive and drive volume, you need to know when to stop. Devise a cost/conversion-based threshold, but keep in mind real-time does not mean end result. Amazon’s latency within its sponsored search platform is well-documented and needs to be accounted for.

Prime Day is Amazon’s day. They made it. They control it. They’re the ones guaranteed to profit from it. But that doesn’t mean the rest of us can’t capitalize as well.