Prime Day 2022 is coming. Whether you are a private label selling your own product, a third-party (3P) seller, or even a wholesale seller buying products from a brand you don’t own to sell on Amazon, the most important thing you can do in preparation for Amazon Prime Day 2022 is make sure you have the right quantity and variety of SKUs at FBA ready to sell, and the right marketing strategy to drive traffic to your listings.
Kaspien Senior Marketer Brittni Rizzo and MyFBAPrep Co-Founder Taylor Smits teamed up to create a webinar on this topic explaining effective Amazon Prime Day marketing strategies and managing your inventory with what happens on Amazon Prime Day in mind so you can avoid the penalties of running out of stock.
In this blog, we’ll break down exactly how to take advantage of Prime Day, what you need to do to before, during, and after Amazon Prime Day 2022 to dial in your marketing and logistics and boost your Prime Day sales.
The buzz around Prime Day exists because Amazon itself puts forth the effort to bring a lot of people into the Marketplace for this event. There’s a huge increase in traffic on the site. “Think of a mall around Christmas,” says Smits. “Every store benefits from more people at the mall. The same is true on Prime Day.”
Amazon does a great job driving traffic to the platform so as sellers, we can all increase our sales. The week of Prime Day, you’ll typically see a 150% increase in traffic, but you can also expect an aftershock of about 68% the week after. This is why it’s so important to have a solid Amazon Prime Day strategy in place so you know how to prepare, how to sell on Prime Day, and how to keep the momentum going.
The most important thing you can do in preparation for Prime Day 2022 is make sure you have the right quantity and variety of SKUs at Amazon by getting inventory into FBA no later than June 20, 2022. Make sure understand the FBA prep guidelines and your logistics are dialed in and ready for the spike and sales.
Here are a few strategies to consider as you prep for Prime Day:
Smits recommends you start sending inventory to Amazon earlier and talk to your 3P seller to see what capacity they have to start getting more inventory to Amazon ahead of Prime Day to help you scale. We don’t know exactly what day is Prime Day 2022, but it typically falls during the second week of July, and we do know that inventory has to be at FBA by June 20, 2022.
To avoid a bottleneck or supply chain failure, private label sellers and wholesalers should look at utilizing suppliers and manufacturers from different regions. A diversification strategy can really come in handy to avoid running out of stock and ensure you can have the appropriate amount of inventory on hand for Prime Day.
You also want to look at you Inventory Performance Index or IPI score, which will have an effect on how many units Amazon will allow you to send in. We all remember the headache inventory limits caused at the height of the pandemic, so it’s good to know this number ahead of time.
In 2020 and 2021, there was a massive uptick in online sales due to the pandemic. When trying to gauge the amount of inventory needed ahead of Prime Day 2022, Rizzo recommends basing your inventory predictions on 2021. “Err on the side of staying in stock,” says Rizzo. “Your main goal on Prime Day 2022 is to protect yourself against selling out.”
Order enough to meet anticipated demand using the 2021 data, and overestimate by about 10%. Remember: too much is better than not enough. “If you order more than you need for Prime Day, that inventory is already in FBA ready to go out,” says Rizzo. “So, there’s really no downside.”
One week before Prime Day 2022, increase your ad budget by at least 50%. “It’s going to be more competitive that week and the prices are going to go up,” says Rizzo. “Protect your space, but keep in mind people will be utilizing non-branded keywords to search for products. This is your chance to attract them.”
Here’s a quick breakdown of what to do for each ad type:
The goal of increasing ad spend is to create more brand awareness leading up to Prime Day, especially for customers in the awareness and consideration phases. Shoppers will be on Amazon before Prime Day looking for deals on products. Focus on your top-converting, non-branded keywords and utilizing a complete Amazon Prime Day advertising strategy to get full saturation on these pages.
There are several strategies built into Amazon Prime Day to increase conversions and boost sales. Here’s a quick look at a few of the most common Prime Day marketing tools.
Amazon deals, particularly Deal of the Day, are due far in advance by April 29 and are approved on the SKU level. There are eligibility requirements for approval, which Amazon is known to be strict about. Some of the things Amazon looks at are:
Make sure you meet these requirements to give your SKUs the best shot of approval.
Coupons are a great way to incentivize buyers and create a higher conversion rate. When you’re looking at coupons, you need to decide which items you should you put them on, whether to present the coupon as a percentage off or dollars off, and whether or not you should include your entire product line, top-selling products, or liquidation items.
“Your best-sellers are best-sellers for a reason; people will buy them regardless,” says Rizzo. “However, I do think providing a coupon across all of your SKUs on ASIN is a very important strategy on Prime Day, so don’t exclude your best-sellers.”
As for percentage off vs. dollar off, Rizzo explains that the dollar-off incentive tends to convert better with the higher values items. For example, a $4 coupon on a $20 item doesn’t seem like much, so it’s better to go with a coupon advertising 20% off. For a $200 item, that $40-off coupon does convert a little bit better.
When applying settings and limitations to your coupons, Rizzo’s recommendation is to go with what’s best for your brand, defaulting to unlimited redemption and keeping the coupon open if you’re really trying to drive sales.
Prime Exclusive Discounts are great, they are very similar to coupons, however they are more exclusive and come with restrictions. If you’re deciding between Prime Exclusive Discounts and Coupons, those extra hurdles make coupons the better option.
In addition to making sure you have enough inventory before Prime Day and the right ads in place to build brand awareness, you also want to optimize your product pages. This means detailing out your product listings so customers can not only find your products but also know what they are getting and feel confident making a purchase. Here are some goals for Prime Day 2022 listing optimizations:
Listing optimizations can be updating A+ Content, images, descriptions, keywords you’d like to rank for, etc. This is crucial for both discoverability and viability. “We want to be discoverable through our keywords and our marketing campaigns, but we also want to put our best foot forward by describing our products and what people can anticipate shopping with your brand,” says Rizzo.
If someone goes through the sales process and not get what they expected, returns will likely follow. Set clear expectations and that will help mitigate some of the returns. This is why it is so important to have accurate descriptions and set clear expectations. On the logistics side, it’s also much easier and more cost effective to prevent returns than it is to process them. expectations are the first line of defense against returns.
End of May should be your last ditch effort to make these page optimizations.
Now that we’ve prepped for Prime Day….
Hint: it’s all about managing supply and demand.
Increased traffic equals increased sales, but your top priority for Prime Day is not necessarily making sales. Your primary goal in Q4 and Prime Day are the same: Don’t run out of inventory.
MyFBAPrep co-founder Taylor Smits recommends keep your inventory close to replenishment. There’s really only three steps between the origin of your products and the inventory being available to sell on Amazon:
Smits recommends keeping your inventory ready at Step 2 so it can quickly be replenished. Another big trend is to create mirror FBM listings you can turn on in case you run out of FBA inventory. If you run out on Prime day or shortly after, you can continue making sales while that inventory is in transit between Step 2 and Step 3. Using a company like MyFBAPrep can reduce replenishment time to avoid out of stock penalties.
Executing an effective Prime Day strategy is all about managing inventory. “If you run out of supply, the demand doesn’t matter,” explains Smits. “You can’t make sales if you’re out of inventory.” Your focus will very quickly shift back to logistics, and that shift in focus hurts sales.
Furthermore, when you run out of inventory, you have to fight for your ranking again. You put in so much work optimizing keywords and targeting the right competitors, but if you run out of inventory, your campaigns stop working because nobody can make a purchase. Conversions will go down, as will your ranking. “Ultimately, the goal is to sell as efficiently as possible,” says Rizzo. “But if you run out of inventory all the work you’ve done will go to waste. Increased demand only matters when you have supply.”
In the unpredictable environment of Prime day, learning how to balance demand with your supply is critical to inventory management. Look at SKU, competition, and historical data. Make sure you have the budget to stay engaged throughout the day and increase your daily budget for what is best for your brand. With Prime Day lasting for 2 days, you want to make sure you have enough money for both.
Your focus on Prime Day is being top of page, first page. Here is a checklist to help get you there:
Prime Day tends to be an “I want” shopping day where shoppers are buying for themselves as opposed to the Q4 holiday season when shoppers are buying for others.
If you’ve done your job properly, creating detailed product listings and managing customer expectations, you should not notice a huge increase in returns, although it might feel like more due to the bump in sales.
If you use FBA you can avoid paying for returns because this service is included in FBA fees. Partners like MyFBAPrep can also handle Amazon returns for clients, and Amazon consultants can help you set up the right partnerships and policies to mitigate returns costs.
Here’s what you need to do immediately after Prime Day 2022:
Amazon Prime Day is a pilot for ‘The Turkey 5’ (Black Friday through Cyber Monday) and the holiday shopping season. The information you learn on Prime Day 2022 can help you create and adjust your campaigns in the six months leading up to the holiday season.
In addition to a huge mid-year bump in sales, the information you learn on Prime Day 2022 can help you create/adjust campaigns and really drill down on the effectiveness of your campaigns. What ad types worked? What didn’t? What really resonated with consumers? Document as much as you can so you can bolster your campaigns for Q4.
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