Deep Discounts Not Necessary for Prime Day Success

Amazon is touting some pretty deep discounts from its marketplace sellers this Prime Day. For example, Segway is offering 20% off its miniPRO self-balancing personal transporter, LunoWear is offering 35% off men’s watches, and LSTN is offering 50% off headphones and speakers.

But offering deep discounts on the Amazon marketplace on Prime Day does not necessarily mean a successful sales day. Ecommerce experts say you just have to have merchandise available for purchase on the Amazon marketplace to see a Prime Day sales spike.

Ranjit Mulgaonkar, founder and CEO of online retail marketplace management firm DNA Response, said his clients chose to not offer discounts last Prime Day, and still saw an 81% increase in sales vs. the prior day.

“Last year, a lot of people were complaining about the quality of products that were discounted on Prime Day,” Mulgaonkar said. “You may sell more product [by offering a discount], but what will your margins be?”

Silver Star Brands director of ecommerce Ian MacDonald said his company’s seven brands also did not offer discounts last Prime Day. Silver Star Brands orders via its Amazon channels were up 171% compared to the days leading up to Prime Day, as well as a 101% lift in revenue.

“There were some pricing promotions we could have been a part of, but they really weren’t impactful,” MacDonald said. “You see a lot of discounts from other sellers, but our items aren’t branded and sell for under $20, so a markdown really isn’t necessary for us.”

Mulgaonkar said his clients are choosing this year to take the natural sales increases that come with Prime Day, and feel it will bring an even bigger sales spike than last year. That’s because Mulgaonkar feels Amazon has done a better job promoting Prime Day.

In lieu of the reported minimum 20% discount to become a major Prime Day player, Mulgaonkar said his clients will beef up their advertising efforts within the marketplace.

Mulgaonkar said Prime Day is a good opportunity for retailers with excess inventory to clear it out, but added that his clients, who are mostly manufacturers, sell newer or currently-being-sold items, which wouldn’t be prudent to clearance pricing.

“Prime Day could be beneficial to dispose of excess inventory, but my belief is excess inventory should not be the only product offering, or the sale starts looking like a flea market,” added Alan Fergurson, Senior Vice President Home Entertainment at video production company Kino Lorber.

“I think most consumers are going to be looking for great offers on front line product and will react dramatically to that type of offer, vs. a sell off of product that usually did not sell well,” Ferguson said.

Tim Parry is Multichannel Merchant’s Managing Editor, and the lead programmer for Growing Global. Multichannel Merchant Associate Editor Daniela Forte contributed to this story.

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