How can I do better than my competition on Amazon?
This is the single question that every Amazon seller is always looking to answer. Luckily, Amazon has created powerful marketing tools and promotions like Amazon Lightning Deals that can help you succeed. Understanding why these promotions are useful and when to implement them is your challenge.
While you can see success utilizing any of the Amazon promotion types, Amazon Lightning deals are short term promotions that can have incredible long-term benefits for your business.
Below, we cover everything you need to know about lightning deals and explain how to use them to grow your Amazon sales.
What Are Amazon Lightning Deals?
Amazon Lightning deals are limited, time-sensitive promotions that Amazon shoppers love. These promotions offer heavily discounted products for a short-period of time, hence the name, lightning.
The lightning deal offers are available to all Amazon users except during Prime Week, when they’re only available to Amazon Prime members.
Lightning deals can be run on both the Amazon Seller Central and Amazon Vendor Central platforms. The set-up process for each platform is different, but the buying experience for every customer is the same. Amazon Vendor Central users can submit deals for any product if it meets Amazon’s demand forecast requirements. Seller Central users can submit deals for products that Amazon recommends on the Lightning Deals tab.
Amazon features all of the lightning deals on a special page on the marketplace and includes a countdown for shoppers for when the deal will go live. Amazon users can sign up to join a waitlist and reserve the product for purchase once the deal starts.
The Requirements for Amazon Lightning Deals
Amazon can’t have every seller running lightning deals at once though. That’s why there are a few requirements you must meet before setting up your lightning deals. The Lightning Deal requirements are:
- The discount must be greater or equal to 20% of the retail price during the period that the deal will run. If you lower your price and the discount is not equal to 20% or more your deal can be cancelled.
- For Seller Central, you must have a professional seller account.
- You must have the minimum required deal inventory at Amazon Fulfillment Centers before the deal is scheduled to start. Seller Central users are responsible to meet this requirement on their own. Vendor Central users will receive additional purchase orders to meet the projected demand for the lightning deal.
- The product review rating for Seller Central users must be greater than 3 stars and your seller feedback rating must also be greater than 3. Here are a few email tips to increase Amazon reviews.
- The product cannot be classified as an add-on item.
- The product must be in new condition.
- Cannot be a restricted product or offensive, embarrassing, or inappropriate product.
- Your product must be Amazon Prime eligible for every state, province, or territory in the marketplace. Amazon Vendor Central products are always Prime eligible.
- The Lightning Deal product cannot have an Amazon retail offer. This means that any product sold by Amazon cannot have a deal created on Seller Central.
- Comply with customer review and deal frequency policies.
If your product meets all these requirements you then have to pay fees to run your deal. The Amazon Lightning Deal fees can range from $150-$300 per deal during the course of the year on Seller Central. Lightning Deal fees can go higher than $750+ per deal during Prime, Black Friday or Cyber Monday weeks.
Vendor Central users submit a funding amount to Amazon for each lightning deal. Instead of selecting a discount to offer sellers you are promising to reimburse Amazon for a specific amount if they run a lightning deal on your behalf. You can select a funding amount by a percentage or specific dollar amount. You can also limit the number of products for a lightning deal on both Amazon platforms.
Why Amazon Lightning Deals Work
Amazon Lightning Deals work because of how they interact with the Amazon A9 Algorithm. The algorithm takes into account many different factors, but the most important factors are pricing, sales velocity, and conversion rate:
- pricing really depends on how attractive your product’s price is to shoppers
- sales velocity is how many units have you sold in the past
- conversion rate is how many users that visited the product page actually purchased the product
The goal of every great marketing and promotional strategy on Amazon should be to maximize sales velocity and conversion rates. Creating great SEO content and product page images will go a long way to increasing your Amazon conversion rates and therefore sales velocity. But using promotions like Lightning deals can increase both of those metrics far beyond what the content will do on its own.
Depending on how the customer finds your lightning deal this can also lead to increased relevancy for specific search terms. Each search term that leads a customer to buying a product is tracked by Amazon. The purchase, or conversion, signals relevancy for that specific keyword to the algorithm. An increase in conversions on a specific search term can lead to an improved ranking within search results.
You could also consider maintaining a lower product price immediately after a lightning deal sale. The effect of increased visibility created by the lightning deal can be multiplied if you continue to drive sales and more conversions after the deal. Lower pricing will keep your product attractive to buyers and can keep bringing more sales, improve the conversion rate, and increase your visibility on Amazon.
There are also additional marketing benefits to running Amazon lightning deals. Amazon tracks customer actions on the website including the pages they visit. They will also try to re-target customers using display ads on Amazon and with third-party advertising networks. A lightning deal will increase your page visits and show Amazon which customers are interested in products like yours. Amazon’s additional advertising could lead to more sales. You could also run your own advertising through Campaign Manager or Amazon DSP to take advantage of display advertising on Amazon and through third-party networks.
Summing it Up
Staying competitive on the Amazon platform means you need to constantly learn more about each unique Amazon feature. The promotions available to Amazon Seller Central and Vendor Central users can provide powerful boosts to your sales when implemented properly. Both sellers and vendors on Amazon are able to take advantage of these deals even though the setup is slightly different.
The amount of lightning deals you can run are limited by Amazon and their deal requirements. Fees can be prohibitive for many sellers and you need to consider what your potential benefits of the deal are in relation to the costs. However, using Amazon Lightning Deals can help you increase your sales velocity and conversion rate which can lead to even more organic product sales down the road.
About the Author: Mike Begg is the co-founder of AMZ Advisers. Mike and his team have been able to achieve incredible growth on the Amazon platform for their clients by optimizing and managing their accounts, creating in-depth content marketing strategies and running effective off-platform marketing campaigns.