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Amazon Prime Day Series (Part 4 of 4) – Game Planning

With something as big as Amazon Prime Day, ultimate success comes down to preparation. With the four strategies outlined in our previous entry in our Prime Day Series, we’re going to dive right in and unpack how brands should prepare for Prime Day.

General Game Planning:

Anytime Amazon runs a major sales event – Black Friday, Cyber Monday or Prime Day, the lead up to the event is critical. What is considered “normal” will change dramatically for both Vendor Central (1P) and Seller Central (3P). 

Every year we see the greatest deviation from the norm in three key areas, Amazon’s logistics network, Amazon’s advertising platform, and the responsiveness of Amazon’s staff for managing issues.

In the lead up to major sales events, Amazon’s logistics network gets messy. Due to the rush of Sellers and Vendors working with Amazon to load inventory into the Amazon Fulfillment Network, the typical process of moving inventory from a brand’s warehouse to an Amazon Fulfillment Center is much more challenging. 

Considering that the typical process to get inventory ready for sale on Amazon requires all of the following steps, it doesn’t take much for the process to get off-track:

  1. Create shipments for inventory (Seller Central) or confirm purchase orders (Vendor Central)
  2. Schedule the pickup(s) of the inventory
  3. Physically load the LTL or FCL palletized inventory onto the freight provider’s truck
  4. Route the shipment to the Amazon Fulfillment Center
  5. Delivery of the inventory to Amazon’s Fulfillment Center by the freight provider during a precise appointment window.
  6. Amazon’s Warehouse Team checks-in the shipment
  7. Amazon’s Receiving Team physically receives all the inventory for every shipment
  8. Amazon redistributes the inventory to other fulfillment centers within their network as needed to meet nation-wide demand 

All it takes is a single delivery appointment being missed by the freight provider at Amazon’s designated Fulfillment Center and it can take another 7-15 days for the inventory to become available for sale. 

Amazon can also independently decide to redistribute all of the inventory that a brand sends to the fulfillment centers to better meet customer demand. This redistribution process can result in inventory being held in “reserved” status and changing the product detail page to the dreaded “available on XXXX Date” shipment notification for customers. This lack of true 2-Day delivery can dramatically decrease the conversion rate on a given product page.

As a result of these uncontrollable variables, we recommend our clients ship inventory at least three weeks before they normally would through Seller Central or to be prepared for larger Purchase Orders from Vendor Central several weeks earlier than normal. If the client we’re working with has a product that will be heavily promoted during Prime Day, we recommend adding an additional three to four weeks on top of the extra three weeks for fully processing the inventory.

As for the changes we see in Amazon’s advertising platform – it’s all about volume! During the lead up Prime Day there is a rising bell-curve of additional traffic as people research the items they may purchase during the sales event. The peak of the bell curve of traffic is during Prime Day and then it begins to decline. 

Many businesses don’t think about the residual traffic that continues after the sales event. 

Due to the increase in traffic around Prime Day, competition for keywords intensifies. This results in several outcomes depending on a brands’ strategy. If a brand elects not to increase their advertising budget, or their bid per keyword, they could actually see stagnant or fewer impressions, clicks, and conversions because their paid ad is shown less. Alternatively, if a brand increases their advertising budget and increases their spend per keyword, the sales increase can be dramatic due to a greater visibility to more potential customers. The bottom-line is that Amazon wants companies to spend money on advertising during Prime Day.

Based on a brand’s goal for the event, adjustments to the daily advertising campaign budgets and the keyword bids should be adjusted at least 30 days prior to the main sales event and remain adjusted until at least 30 days after the event with incremental adjustments throughout that 60-day period.

Finally, the last major area of change we see during sales events like Prime Day, is the responsiveness of Amazon’s own teams. 

We all know that working with Amazon’s teams can be challenging, especially through Vendor Central when working with the Retail Team. This gets even harder during crunch time, or “Peak Season” as it is called. If you ask someone who has worked or currently works at Amazon, they’ll measure their tenure at the company as the number of “Peak Seasons” they’ve survived. Peak Season is a big deal.

Since everyone involved cares so much about Prime Day’s success, Amazon’s customers, staff, sellers, and vendors, anything that is not absolutely critical is unlikely to be resolved or even attended to the closer to Prime Day we get. We recommend that brands plan to complete all their content changes, general financial reporting, inventory reconciliation, and other daily tasks at least four weeks before the sales event. The closer in proximity to the event that a brand attempts to make some change, the less likely that change or analysis can be implemented or resolved. In other words, we suggest brands get their ducks-in-a-row by late May or the first week of June in most cases for Prime Day.

Now, to combine a brand’s strategy with the challenges mentioned above:

“Go Big” ­Game Planning:

Amazon Logistics Network:

Whatever item(s) the brand has decided to go big on, they should ship 50-300% more inventory than a normal for the week of Prime Day and get that shipment sent out by the first week of June.

Amazon Advertising:

Brands should increase all advertising campaign budgets by 10-30% starting in the middle of June and keep it up until early August. Brands should also have their advertising team checking on each campaign budget’s usage and make additional increases if needed to ensure full participation in Prime Day. 

Depending on category, brands should increase their keyword bids for generic search terms related to their item(s). This is especially important for companies selling product in generic/commodity categories or brands selling consumables since the first purchase is the hardest to capture.

Brands should also utilize their marketing assets like their email list and social media accounts to activate buyers on Prime Day by creating a drip-campaign that builds enthusiasm and anticipation of the special pricing or promotion leading up to Prime Day. 

Amazon’s Responsiveness:

Brands should plan on getting almost no response from Amazon’s team, regardless of platform in the two weeks leading up to the event. We recommend that anything that needs to be handled with care by an Amazon team member, is completed by the end of the first week of June. If it isn’t done by early June, brands should assume it won’t get much attention until mid-August.

“Ride the Wave” Game Planning:

Amazon Logistics Network:

By “Riding the Wave”, a brand is electing to use Prime Day as a nice summer sales bonus, but not much more than that. Brands using this strategy should plan to ship 10-50% more inventory for the Prime Day week as they would normally sell in the middle of the summer. This inventory should ship no later than June 10th.

Amazon Advertising:

A brand electing to “Ride the Wave” should plan to increase their daily campaign budget in much the same way that a brand using the “Go Big” strategy would. The main differentiator is in what is done at the granular keyword level. Brands should focus their advertising spend on the best performing keywords across Branded, Generic and Competitor keyword campaigns for each item, and both redeploy budget from mediocre to excellent campaigns and increase the total daily campaign budget. This ensures that the money that is spent will be on the most effective keywords while reducing the impact of the weaker keywords. The brand stays in the game from an advertising perspective by being more aggressive, but they target only that where it leads to the most effective sales lift.

Amazon’s Responsiveness:

Amazon’s team won’t be any more or less responsive based on a brand’s strategy, so brands using this strategy should still plan to have anything that needs to be handled by an Amazon team member completed by the end of the first week of June otherwise expect to wait.

“New” or “Exclusive” Product Launch Game Planning:

Amazon Logistics Network:

By focusing on a specific product for Prime Day, a brand is using Amazon more as a fulfillment partner than a place for exposure. When using this strategy, a brand has very little historical sales to reference, so the right amount of inventory has much more to do with the estimated impact a brand’s own off-Amazon marketing will accomplish. If a brand has an email list that converts 1.5% of the time, and has 5,000 emails, a brand could capture as many as 75 sales for this “new” product on Amazon. Once a brand-controlled sales estimate is established, we recommend sending in an additional 20-30% of the units to account for some traffic that their product will gain during the Prime Day event.

A brand should plan to send in their new item by the end of the first week of June to ensure that there are no issues with the inventory being received by Amazon. When a new item is first delivered to Amazon’s Fulfillment Centers, there is a high likelihood that they will redistribute a majority of the units to other facilities to lay the initial inventory foundation for the products across the country. By shipping product in early June, these additional 7-10 days of transportation time for redistribution can be managed.

Amazon Advertising:

Advertising a brand-new product on Amazon, regardless of timing, is very challenging. Not only does a brand likely face competition with a product that has no search history or reviews, but Amazon may also limit the reach of the new product’s advertising campaigns in order to promote the products that have the highest bids and that are the most likely to convert for the terms historically. Brands have to keep in mind that Amazon makes money on all sides of the transaction, not just the advertising spend, so conversion rate a critical element to success on Amazon. This means, that even if a brand has a big ad budget, they may struggle to actually utilize this large budget for a new item directly on Amazon. Our best recommendation for advertising on Amazon under these circumstances, is to go heavily after branded search terms since that is something that remains highly relevant to the new product as an extension of the existing product line.

Amazon’s Responsiveness:

Same as before, Amazon’s team won’t have any special resources available for a new product launch, so brands should make sure everything is completely setup by early June to make sure the product page is ready for the go-live kickoff.

“Off-Amazon” Game Planning:

This strategy stands apart from the others and is highly dependent on what a brand tries to do. If a brand is truly going “off-Amazon”, the inner-workings of Amazon’s logistics, advertising, and customer support team is meaningless. Brands should, however, be generally aware that the traffic for eCommerce sales will certainly increase even on other marketplaces like Walmart.com or through Google’s searches, so the same type of planning that goes into an event like Black Friday, should go into Prime Day to take advantage of an engaged consumer-base.

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