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Amazon Prime
TL;DR
Starting August 14, 2024, Amazon is introducing a $50 fee for Prime Exclusive Discounts offered during major deal events like Prime Big Deal Days, Black Friday, Cyber Monday, and Prime Day.
If you don’t make any sales during the event, the fee won’t be charged.
The fee remains the same whether you apply the discount to 1 product or 100.
As if sellers weren’t already struggling to keep track of an ever-growing list of fees, Amazon has introduced yet another fee type to the mix. What is this new fee, why has it been introduced, and after this fee, is Prime Exclusive Discounts still worth it?
We’ll cover all of this and much more in this blog post. Keep reading!
What’s the update?
There was a time—ahhh, happy times—when Prime Exclusive Discounts were completely free for Amazon sellers.
But not anymore.
Starting August 14, 2024, Amazon is introducing a $50 fee for Prime Exclusive Discounts offered during major deal events. These events include:
Prime Big Deal Days
Black Friday
Cyber Monday
Prime Day
Amazon's official page states:
I don’t get it—how will the fees be applied?
Let me explain—whether you're discounting select bestsellers or your entire catalog, the $50 fee applies. But it’s not such a bad thing. Here’s the even better news: if you don’t make any sales during the event, the fee won’t be charged. This ensures that sellers are only paying when their discounts lead to sales. Maybe Amazon isn’t as bad as it seems, right?
I know the next question that’s popping into your head: Should I discount my bestsellers only or all the products in my catalog?
Well, good question! If you ask me, you should discount as many products as you want. But that doesn't mean you should blindly apply discounts to your entire catalog—that would be insane. Before applying any discounts, ask yourself if your product is retail-ready or not. If you don't know what retail readiness is, seriously, are you even reading our blogs? Because if you were, you’d know!
In simple terms, retail readiness means preparing your listing for the upcoming traffic. How do you do this, you ask? Well, it means ensuring that your copy provides all the information shoppers need to make a purchase, your images are appealing and show the product from at least five angles for a 360-degree view, you have enough stock (DUH!), you have at least 15+ reviews with an average rating of 4.5 stars, and most importantly, you have the buy box.
We've given you all the information, but now it's up to you to take the next step. Of course, if you need a little extra help, you can always reach out to the Amazon sales consulting experts at eStore Factory. Just saying!
But it’s not all bad
It’s important to note that Amazon is only charging these fees during the major events listed above. Outside of these peak sales events, Prime Exclusive Discounts will remain free. This means you can still offer discounts to Prime members without incurring any additional fees on non-event days. See, it’s not all bad!
So... should I still run Prime Exclusive Discounts?
Well, it depends! That might sound vague, but we’re going to dive a little deeper to clarify what we mean.
To decide for yourself, start by reviewing your previous Prime Exclusive Discount campaigns. How did they perform? Did they bring in profits, or were they a total miss? If the results show that they performed well, then paying a $50 fee is likely worth it—especially if you have a large catalog of products, in which case it’s worth considering.
Now, for those who might say, “I’ve never run a Prime Exclusive Discount campaign—what should I do?” Well, in that case, paying the fee could be a good experiment to see how these campaigns perform for you. You won’t know unless you try, right?
However, if you’re in a delicate financial situation, with low cash flow, and spending extra money doesn’t seem wise, I’d suggest steering clear of Prime Exclusive Discounts for now. Why? Because there are still many other discount options that remain free—for the time being!
If not Prime Exclusive Discounts, then what?
If you think you cannot afford to spend any extra money just for some traffic, don’t worry—there are plenty of other options that are completely free to use. Below, I’ve listed them all so you can make your pick!
Coupons - Sellers can offer discounts to customers in the form of coupons, which are displayed on product listings. Coupons are free to set up, but Amazon charges $0.60 per redemption.
Social Media Promo Codes - Amazon allows you to create special promo codes that you can share on social media platforms. This is a free option, but it requires you to have a good social media following to be effective.
Buy One Get One (BOGO) Promotions - These are deals where customers can buy one item and get another at a discount or for free. This promotion is also free to set up on Amazon.
Price Discounts - You can simply reduce the price of your products during peak shopping seasons without incurring any additional fees. This basic approach can be effective in increasing sales.
The simple rule for tentpole events like Prime Day and BFCM weekend is that you need to spend more to earn more. It’s a harsh truth, but it’s crucial to remember that, as we mentioned above, your listing must be ready for the traffic.
Imagine you run heavy promotions with irresistible offers, but BAM! You only have a 3.5-star rating, terrible negative reviews, no stock, or blurry images. In that case, are the promotions worth it? You might be ready to offer your products at a great price, but is anyone ready to buy them? Not really.
That’s why our Amazon FBA experts ask every seller we work with to get their listing retail-ready first. We've already discussed what a retail-ready listing is, and we can’t stress enough its importance.
If your listings are not already retail ready, please get them done because big events are coming up:
Prime Big Deal Days: Expected in October 2024 (exact dates to be announced)
Halloween: 31st October
Black Friday: November 29, 2024
Cyber Monday: December 2, 2024
Why did Amazon launch the Prime Exclusive Discount fee? Why not keep it free?
A question that’s on everyone’s mind: there are already so many other fees charged by Amazon, so is there really a reason to add another fee? The simple, immature answer might be because it’s Amazon, a retail giant that can do what it wants.
But if we take a more thoughtful approach, the answer might be because Prime Exclusive Discounts have become very popular. They were first launched in 2019, just before Prime Day.
In Prime Exclusive Discounts, the product offers to display a discounted price with the regular price crossed out, plus a savings summary in search results and on the product detail page. For example: “You Save $13.50 (15%) as a Prime Member.” On Prime Day, products also display a Prime Day Deals badge.
Over 5 years, Prime Exclusive Discounts have become very popular. Many sellers are using them, and Amazon might have seen an opportunity to capitalize on the growing number of sellers investing in Prime Exclusive Discounts.
Another reason might be that Amazon wants to ensure that only serious sellers, who are confident in their product offerings, participate in these promotional opportunities.
Keeping Prime Exclusive Discounts free might have led to an overwhelming number of low-quality or poorly-prepared listings, which could diminish the shopping experience for Prime members during these critical sales events. By introducing the fee, Amazon is encouraging sellers to be more strategic and selective about the products they promote.
See you next week!
So, there you have it. You now know everything about this new update. Whether you decide to use it or not depends on how much you're willing to spend during these tentpole events.
If you need help deciding which discounts to offer, making your Amazon listing retail ready, or anything else related to Amazon, feel free to drop us a line. One of our Amazon Seller Central specialists will be right there to assist you!
