Resources » Blog » Amazon Prime Day: The Real Pros and Cons for Sellers

Important News

Amazon Prime Day: The Real Pros and Cons for Sellers

Last year’s Amazon Prime Day was the biggest Prime Day ever — perhaps more so for third-party sellers than for Amazon. For the very first time, sellers like you outpaced Amazon’s own retail business!

That’s no small feat, given that US customers spent $12.7 billion during the massive two-day sales event. Independent sellers should be incredibly proud of this enormous win.

But it’s not all sunshine and roses. The overall performance of last year’s Prime Day fell short of earlier estimates, average order volume decreased year-over-year, and Amazon’s new Big Spring Sale wasn’t so big after all.

In this article, we’ll run through the real benefits and drawbacks to help you make the most out of Prime Day 2024.

The Pros and Cons of Selling on Prime Day

In 2024, higher inflation remains an issue. Yet consumers are trending more optimistic about spending than in previous years. Which means this year’s Prime Day numbers could go either way.

What can you expect for 2024? Do independent sellers still stand to earn big? Let’s dive into the pros and cons of Amazon Prime Day for sellers.

The Pros

If you’re still on the fence about whether or not to participate in Prime Day, here’s a recap of some potential benefits to consider.

  • Increased Exposure: On Prime Day 2023, customers purchased over 375 million items worldwide. Advertising on Prime Day can also increase brand awareness and consideration by over 200%, compared to the week prior. Plus, Amazon Live streams on Prime Day got more than 100 million views in the US and India.
  • Increased Sales: DTC brands like Caraway, True Classic, and TUSHY (which Amazon calls “small businesses,”) saw their average daily sales rise by more than 18x during the Prime Day 2023 event.
  • Clearing Unsold Inventory: If you have lots of extra product to move, offering the right deal and promoting it well could clear dead stock out of your warehouse — earning you a profit, saving on storage costs, and avoiding further liquidation headaches.
  • More (and Better) Product Reviews: The more you sell on Prime Day, the more product reviews you’ll rack up. Positive reviews can have an exponential effect on your e-commerce growth and research shows that customers are more likely to rank and review your product highly if they get it on sale.

The Cons

There’s a lot to be gained by participating in Prime Day, but there are also some real costs that come with chasing that Prime Day sales boost.

  • High Fees and Low Margins: With selling plans, referral fees, fulfillment fees, and aged inventory surcharges, selling on Amazon can quickly get expensive. Lowering prices, increasing your inventory, spending on promotion, and paying Prime Day fees may simply be too much on your margins.
  • Overstocking and Underselling: If your product doesn’t perform well on Prime Day, you could be stuck with extra stock — especially if you overestimate and order too much inventory. In addition to the cost of the product, you could end up paying more for storage or liquidation.
  • Competition: Prime Day hype means increased competition from other sellers on Amazon. You’re not just competing with other marketplace sellers and pseudo-brands.  You’re also battling other large retailers like Walmart, Target, and Best Buy, and even going head-to-head with Amazon itself.

Is Amazon Prime Day Profitable for Sellers?

Because of the massive uptick in web traffic, many sellers can expect to see increased sales on Prime Day. Offering a deal or discount can put your product front and center and help you earn even more.

On the other hand, selling on Amazon keeps getting more expensive, with inflation costs passed on to third-party sellers in the form of fee hikes, new fees, and increased ad prices. Plus, with more Amazon sales spread out over the year, consumer fatigue could mean less traffic and fewer views.

If your profit margins are already tight, the costs associated with active participation in Prime Day — like increasing your ad spend, beefing up your inventory, and paying to offer Prime Day exclusive deals — could mean the higher sales volume isn’t worth the expense.

Amazon Seller Central offers a calculator to help you determine the potential profitability of your business, but you might be better off relying on more sophisticated analytics tools to make an informed decision.

How to Prep for a Successful Prime Day

With the right data and approach, participating in Amazon Prime Day can be a great move for your business. 

Here are some steps to take to increase your odds of Prime Day success:

  • Act early to take advantage of Prime Day promotions, like Lightning Deals and Prime Exclusive Discounts. The deadline for creating your deals is May 3. Keep tabs on the Prime Day prep page for any additional time-sensitive updates and consider additional promotional tools, like Coupons and Amazon Live.
  • Make sure you have enough product in stock and ready for Amazon fulfillment. If you’re already geared up to offer deals on Prime Day, make sure you’re stocked up. The deadline for getting your Prime Day FBA inventory into Amazon is June 20.
  • Edit and optimize your Amazon product listings. Update and review all your product text, images, and keywords, taking advantage of A+ Content if you have access. Updating your listings early can mean more search hits in the days leading up to Prime Day. Don’t forget to optimize your listings for Google SEO and SGE as well, remembering that readable, authoritative text is increasingly beating out keyword stuffing.
  • Plan and execute a stellar social media and digital marketing campaign. Driving traffic from external channels can boost your sales and lower your PPC ad costs, so peg your social media and email marketing strategies to Prime Day as if it were a real holiday. Take advantage of Prime Day hashtags, influencers, and user-generated content to build up your social community. Use social and email to reconnect with loyal customers and encourage them to review your product or share your Prime Day deals.

Top FAQS about Amazon Prime Day for Sellers

With the right expectations and a clear plan for making the most out of Prime Day, you can take advantage of the increased traffic and sales that come from this major shopping event.

Of course, it helps to know exactly what it is you’re getting into. Here are answers to some of the top Amazon Prime Day FAQs for sellers.

What’s the history of Amazon Prime Day?

Amazon Prime Day is a 48-hour sale event available exclusively to Amazon Prime Members and typically held in July. During the event, Amazon Prime members get access to hundreds of limited-time deals, some of which only last a few hours.

The first Amazon Prime Day was held July 15, 2015 to celebrate the 20th anniversary of Amazon.com’s official opening as an online bookstore. The 24-hour event was accessible to Amazon Prime members in the US, UK, Spain, Japan, Italy, Germany, France, Canada, and Austria.

At the time, it was the biggest sales day in the company’s history, beating even its 2014 Black Friday numbers. Though some were quite vocal about sold out products and other frustrations, customers still ordered a total of over 34.4 million items.

The first two-day Prime Day event was held in July 2019. In 2020, the pandemic forced Amazon to delay the event until October.

In 2022, Amazon held its regular Prime Day in July, and a second event in October, dubbed the Prime Early Access sale. In 2023, it renamed the event Prime Big Deal Days, and held the sale on October 10 and 11.

From March 20 to 25 this year, the company held a new Big Spring Sale, open to Prime and non-Prime subscribers alike. The event was likely conceived to draw in new Prime members and compete with rivals like Shein and Temu.

Do products sell out fast on Prime Day?

With increased traffic and the promise of incredible deals, products tend to move fast on Prime Day. Offering a deal, promotion, or coupon, or running sponsored ads can boost your conversion rates even more.

The biggest sellers on Prime Day are typically Amazon smart home products, like Fire TV Sticks, Blink cameras, and Echo devices. Just below them on the list in 2023 were other consumer electronic devices and non-perishable or shelf-stable consumer packaged goods (CPGs). 

Health & Beauty was the strongest selling category overall, stealing the title from 2022’s winner, Household Essentials. About 42% of shoppers made a Health & Beauty purchase, followed by 41% in Home & Garden, and 32% in Electronics, respectively.

Certain deals on Prime Day are designed to sell out especially fast — sometimes in as little as a few minutes. Lightning Deals, for example, are only offered for a limited number of hours or until stock runs out.

Lightning Deals are promoted on the Prime Day page, upping your odds of getting your  storefront noticed by new customers. The fee to offer a Lightning Deal on a regular day is around $150, but on Prime Days it can be as high as $300-500.

If a Lightning Deal isn’t available or isn’t the right option for your business, you can also boost Prime Day sales by offering a Prime Exclusive Discount. These discounts don’t require a fee, but you need to be in good standing with Amazon. Both Lightning Deals and Prime Exclusive Discounts come with their own set of rules and restrictions.

Who benefits from Prime Day?

Though growth has slowed somewhat in recent years, Prime Day has historically been a huge revenue booster for Amazon. Prime Day may also benefit Amazon by helping to offload excess inventory and enlist new Prime subscribers.

Other retailers have also benefited from what’s called the Prime Day “halo effect.” Target and Best Buy, for instance, have seen a sales boost from running promotional events around the same time. In 2023, however, retailers made less of an effort to compete with Prime Day and site traffic stats reflected the drop.

Prime Members can benefit from lower prices on coveted items and household necessities, but many Amazon customers continue to complain of disappointing or just plain silly deals. If you can offer a discount that feels truly worthwhile for the customer, your store may be poised to stand out from the pack.

But the biggest beneficiary in 2024 may be growing e-commerce businesses, who make up 60% of Amazon’s total sales. In 2023, they (read: you) jumped from only 37% of Prime Day sales to outpacing Amazon itself.

Are things actually cheaper on Prime Day?

Prime Day can bring increased savings for shoppers depending on which items they’re looking for. Amazon devices sell for deeply discounted prices, accounting for their high share of the sales volume.

Other Prime Day discounts can be hit or miss, and savvy customers may be able to find lower prices on Black Friday, Labor Day, and other big sale periods. Competing July sales from other large retailers may also offer lower prices than Amazon on certain items. 

Amazon’s price history is pretty transparent, so it’s easy enough for comparison shoppers to make sure they’re getting a good deal. Sites like Gizmodo and Lifehacker advise shoppers to use price tracking software to double-check deals before buying.

While the vast majority of Prime Day marketplace deals are legitimate, there’s always the potential for bad actors to take advantage. Some unsavory sellers use shady practices to make shoppers think they’re saving, when prices have actually stayed the same or even increased

Make Prime Day Work for You

If you’re already selling on Amazon, participating in Prime Day isn’t exactly up for debate. You’ll still be there on the big day when that influx of extra traffic hits. 

The real question is, how will you use it to your advantage? Whether you choose to create irresistible deals and discounts, or simply stand by and gain from the increased lift in brand awareness, you need to know what to expect and how to plan.

Because the truth is, winning on Amazon doesn’t happen overnight. But with the right playbook, you can make every major shopping event work for you. 

For more Amazon insights and resources, check out the SellersFi Amazon Resource Hub, or subscribe to our newsletter to get exclusive content and offers delivered straight to your inbox.

Tags:

Related Articles

Subscribe to our newsletter and never miss key e‑commerce content.

By clicking on the button, you agree to receive SellersFi marketing communications.