Amazon Prime Day - Benefits to Sellers Last Longer Than One Day - Taxify

Amazon Prime Day – Benefits to Sellers Last Longer Than One Day


Amazon Prime Day is set to return for a third go-round, making it an official institution. On July 11, 2017 the online retail giant will offer deep discounts and flash sales on thousands and thousands of products.

Discounts and slashed prices are always great news for shoppers, but for third party sellers who utilize the Amazon marketplace, the benefits of Prime Day are a bit more mixed.

What Is Prime Day?

In 2015, Amazon launched its own private shopping holiday for users of its popular Prime service. Shoppers who paid for the $99 annual subscription (it is said that up to 46% of American households currently have a Prime membership) would have access to a whirlwind of slashed prices for a day. The event was enough of a success that Amazon brought it back in 2016. And now, expectations are that the 2017 Prime Day will be even bigger yet.

The numbers reported from the 2016 Prime Day do elicit optimism. According to Amazon, the 2016 event saw a 60% worldwide increase from the year before, becoming the biggest sales day in the company’s 21-year history. It’s estimated there were $2.5 billion in worldwide sales on that day alone. So we can certainly hope for big things for the 2017 Prime Day.

This year’s Prime Day will actually be a 30-hour event, extending from 9pm ET on July 10 through to 3am ET on July 12. Over the event, deals will be released periodically and be on offer for maybe five-minutes or an hour at a time; so Prime members looking to take advantage will need to stay alert so as not to miss out on a great deal.

I’m a Marketplace Seller, How Do I Get In On Prime Day?

In the end, Prime Day is an Amazon event — it’s designed largely for Amazon to sell Prime subscriptions, push its branded products (like the Echo or Kindle eReader), and get rid of inventory on its shelves. Which products get discounted and advertised is determined by Amazon. So a small marketplace seller may find itself overlooked.

Further, in order to participate, most marketplace sellers will need to either be enrolled in a Fulfilled By Amazon (FBA) or Seller Fulfilled Prime programs. (Since Prime day is only for Prime members, a product must be engaged in the Prime program to participate.) So a marketplace seller must have their account with Amazon set up properly in order to have their products receive the Prime Day treatment.

The best plan at this late date, then, may be to see how well this year’s Prime Day goes, and get ready planning for the 2018 sale.

Once Prime Day’s Over, That’s It, Right?

Certainly not. While Amazon is the $200 billion gorilla in the room, and any single-day sale that it sets up will gather the most attention, its success speaks more to the opportunities for all online sellers.

Sales and discounts bring the most benefit to retailers when they generate customers who will become repeat customers. Amazon certainly realizes this by heavily promoting its Prime membership (which clearly ties customers to Amazon’s services) and branded products. If you buy a discount Echo, you’ll likely be asking Alexa to buy a lot more goods from Amazon pretty soon.

So consider creating your own sale — whether through your Amazon marketplace or your own website — to create a positive relationship with your customers. Amazon chose to have Prime Day in July so as to drum up business during a traditionally slow shopping period. So your sale doesn’t need to be aligned with a traditional shopping period, like after Thanksgiving. As long as you demonstrate value to your customers, which they’ll recognize, appreciate, and seek out again, your sale will be a success.

And as ever, be careful about how your expanded sales affects your sales tax liability. If you use FBA or other Amazon Marketplace services, you may have nexus in multiple states across the U.S. requiring you to collect and remit sales tax. If you are using your own services, be aware of how many states are looking to stretch nexus requirementsin an effort to extend their tax reach (recent notice and reporting rules in Colorado, Louisiana, and Vermont, just now in effect, and an abandoned attempt by Massachusetts to create nexus through certain online practices, demonstrate these efforts). In these issues, Taxify is there to provide support and information.

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