Prime day is coming. Now is the time to begin prepping for one of the biggest shopping days of the year. The new and improved “Christmas in July” is looking to continue breaking records and deepen the pockets for everyone involved. However, revenue isn’t the only records going to be set, but the number of competing SKUs. As competition becomes fierce, companies need to begin optimizing and running internal tests to prepare themselves.
Prime Thinking
This is one of the most important days of the year to optimize your current strategy. Sellers need to begin their prime day advertisements around two weeks before the event. Amazon will have a high volume of Ads and not enough searches to help out everyone. In a first come first serve system, the longer you wait to begin running those ads, the least likely they will be effective.
“Never judge a book by its cover”… The same is not recommended for online listings. It is important that sellers make their SKU pages standout. First, it is important to know your current SKU standings: how are the reviews? State of your pictures? How much information do you have? It is simple, yet needs to be reiterated. The SKU’s with a better page will almost always lead to the most profits. Customers appreciate the smallest of details like height, width, where the product was made, etc. Information trumps price when it comes to online orders and the lack of being able to look at the products physical orders.
However, Sellers need to make sure that they are investing their time and money into their most profitable items. With a mass amount of competition, sellers will be more successful by focusing on a few SKUs rather than their whole inventory. It is much easier to be great at selling one or two products rather than selling your whole inventory for lower margins.
Prime Pricing
Deals will be dealt; promotions will be promoted; prices will be priced…at a very variant level. A large issue we have seen during previous Prime days is that it is common for sellers to think the must have the lowest price to attract the most customers. This may work but won’t make your business profitable. Like I mentioned in the last paragraph, SKUs with a better page will sell more than a cheap, foreign product. It is important for sellers to understand the financial margins. The best businessmen in the world know how to manipulate their margins. However, this requires complete, understandable financial bookkeeping. We highly recommend to not price on what the market is looking like but a price point that best reflects your store.
Pricing is also variant on inventory. If you are running low (for Prime day), there is no point in selling out. Sellers need to be wary of the potential opportunity cost to let go of your product for less. On the flip side, if an owner feels like they have too much inventory, this is the perfect time to offer lower prices and get rid of the inventory headache. Having more assets can lead to greater security, but cash gives vendors the power to make choices. Sellers need to focus on what is their optimal balance: what is my target revenue? How much of my product do I expect to sell? What does the overall market look like for my SKU?
Conclusion
Prime day is on track to be on the same level as Black Friday and Cyber Monday… if not even greater than that. This is a great opportunity for sellers to turn their inventory into free cash flow and boost a slow summer month’s sales. It is now the time to begin readying yourself for the long sales day and pray to the gods that it may bring you great fortune. I would like to thank Seller Labs for their expert knowledge on the Amazon’s biggest day; if your company needs help optimizing their Amazon listings, we highly recommend our partner and their blog posts! If you’re a seller needing to further understand your books or financials, contact us for a free evaluation!