Using Amazon Lightning Deals to Grow Organic Sales
Every Amazon Seller and Vendor should be creating a promotional and marketing strategy to grow their presence on the platform. But too many do not know how to take advantage of Amazon’s marketing features. Failing to learn and test on the Amazon platform will lead to being passed by the thousands of new Sellers joining Amazon every day.
Lightning deals are one of the deals that every Amazon Seller can use to grow sales. Running a lightning deals can provide long run organic sales growth by providing a short-term, limited discount. This is why it is important to understand how and when to implement each promotion type and why each one is useful.
We help our clients develop in-depth promotional strategies that directly lead to increases in sales. A thorough understanding of how the Amazon platform works and how to set up your products for success is vital. We are going to breakdown what lightning deals are, how you can qualify for them and exactly why Amazon Lightning Deals are a valuable promotion for Amazon Sellers and Vendors.
An Overview on Amazon Lightning Deals
An Amazon Lightning Deal is a special discount offer available to Amazon Prime Members. The deals provide a deep discount to Prime Members for a limited time frame and quantity of products. Lightning deals are attractive for shoppers looking for a great deal. However, they are also attractive to Amazon Sellers who are looking to move a large amount of inventory in a short amount of time.
Lightning deals are featured on the Today’s Deals page which can be accessed directly from the home page. This page displays the Lightning Deals available at that time, the time remaining on each deal and also additional deals that are starting soon. Prime Members can reserve inventory for purchase by joining a waitlist before the deal starts.
Both Amazon Seller Central and Vendor Central users have access to running Lightning Deals. Sellers and Vendors that meet the Amazon Lightning deal requirements can easily set up the deals. The process and terms of setting a lightning deal upon each Amazon platform are slightly different. However, each deal is displayed to shoppers in the same way.
Vendors are able to create a deal for any product in the catalog if the potential deal meets Amazon’s demand forecasts. Sellers can only submit deals that Amazon recommends to them. The fees are also different on each platform. Vendors need to sign funding agreements essentially promising to pay Amazon the discount for every product that is sold. Sellers pay a per promotion fee that changes over the course of the year.
Amazon Lightning Deals Requirements
Amazon schedules when the deals can be run and prevent Amazon Sellers and Vendors from running too many at once. The deal frequency policies established by Amazon allows them to restrict sellers that try to gain an unfair advantage by running promotions like Lightning deals all the time. Amazon has many other requirements that must be met before a Seller or Vendor can submit a product for the promotion. The main requirements to run a Lightning Deal promotion are:
- Discount – An Amazon Lightning Deal requires that the product have a discount equal to or larger than 20% of the average product price in the past 3 months. This 20% must be met when the deal is scheduled to run or Amazon will cancel your deal.
- Inventory – Amazon requires a minimum amount of inventory committed to each Lightning deal. They also allow you to specify a quantity above the minimum that you want to make eligible for the Lightning Deal Offer. The full amount of inventory needs to be in a Fulfillment Center before the deal is scheduled to run. This is why Amazon requires 4+ weeks before a deal can run on the Vendor Central side to place purchase orders for the quantities they need.
- Product and Account Ratings – A product must have a 3.5 rating or higher to be eligible for a lightning deal. Your Seller Central account must have a Seller Feedback rating that is equal to or greater than 3.5 as well.
- Prime – You can only submit products for deals that are Amazon Prime eligible and have no shipping restrictions within the marketplace if you utilize Seller Fulfilled Prime.
- Cannot Compete with Amazon – Seller Central users cannot set up lightning deal promotions on products that Amazon sells themselves. If a product you sell says Ships from and Sold by Amazon, that product is ineligible.
- Product Classification – Add-on Items on the Amazon platform are not eligible for Lightning Deals.
- Seller Central Account Type – To run a lightning deal in Amazon Seller Central you need to have a professional seller account.
- Other Policies – Amazon also requires you to follow all their other policies including their review policy and deal frequency policies.
Products that meet the requirements will need to have the fee paid or funding agreement signed when the deal is submitted to Amazon. Fees for each lightning deal on the Seller Central platform vary between $150 and $300 during non-holiday periods. The fees for Lightning Deals can go even higher during the Black Friday/Cyber Monday period and Prime Week. Fees can cost up to $900 depending on what day or week the deal will run.
The Lightning Deal fees on Vendor Central are handled differently. You’re funding agreement says that you will pay Amazon the discount they are offering to shoppers to offset the money they lose. You can specify whether you want the promotion to be a dollar amount or a percentage of the retail sales price.
How to Use Amazon Lightning Deals Successfully
Your main aim when running any promotion or implementing a broader promotion strategy should be to influence some specific Amazon metrics. You can start to change these metrics by creating great copy and pictures for your Amazon listings however they are not enough on their own.
Amazon search results are governed by the Amazon A9 search algorithm that takes many different factors into account. The most important metrics in our opinion are sales velocity, or history, and conversion rates. Both of the metrics can be directly affected by product pricing on a listing at any given time. Promotions directly affect pricing and therefore can lead to the metrics changing the way you want.
Every seller is trying to get more people to visit their product pages and purchase their offer. Every time a shopper buys a product the sales history and conversion rates change. Each conversion, or purchase signals that this product is relevant for whatever search term the customer used. An Amazon Lightning Deal can lead to large increases in the number of listing page visitors and the great offer should instantly lead to increased conversions. This means that Amazon will know your product is more relevant for that search term and display it higher on results pages.
Running occasional lightning deals will drastically spike your sales and conversion rate for a product, but you need to try to maintain those metrics after the deal ends to continue to enjoy the search relevancy. This is where implementing additional Amazon promotions like coupons or percentage-off promotions can help. Keeping your listing attractive to shoppers by providing value through another type of discount or lower pricing can keep shoppers buying even after the Amazon Lightning Deal ends. Consider coupling a coupon discount with an advertising campaign to see more lasting results after your lightning deal.
Conclusion: See if Lightning Deals Work for You
It is easy to say that running Amazon Lightning Deals are the best solution for every Amazon Seller. However, it is important to know your Amazon goals and understanding how and why any Amazon promotion can help you reach them. Constantly learning and testing the Amazon features is the best way to find the right solution for your Amazon account.
Amazon has created powerful marketing promotions that can help you grow your account if implemented correctly. While the Vendor Central and Seller Central platform may have different access to running promotions, the promotions are more or less the same and using them on either platform can help you grow.
Amazon has different ways of limiting what products are eligible for Amazon Lightning Deals on each platform. You should consider running promotions on your products that meet the Lightning Deal requirements to increase their visibility on the website. It can be tough to justify the fees that need to be paid, but moving from page 2 or lower to possibly page 1 can lead to massive increases in sales. Running the promotions will increase the vital Amazon metrics that matter for the search algorithm and maintaining those metrics after the promotion will lead to more sales in the future.