Coupons or Prime Exclusive Discounts (PED)?
Which is better for Amazon Sales?
One of the questions sellers frequently ask me is whether Coupons or Prime Exclusive Discounts (PED) are more more effective for Amazon sales.
Let's compare these 2 promotions to help you decide which option is better for you.
Let's compare these 2 promotions to help you decide which option is better for you.
Coupons vs Prime Exclusive Discounts at All Times
(Excluding Events such as Prime Day and Black Friday)
During normal times |
Coupons |
Prime Exclusive Discount (PED) |
Fees |
$0.60 per redemption |
Free |
Discount |
|
|
Seller Feedback Rating |
≥ 3.5 star or no rating |
≥ 3.5 star or no rating |
Product Criteria |
|
|
Benefits |
|
Deal badge |
Use case |
To increase impressions, click-through rate, and conversion rate. Potential increase in traffic (impressions) from the Coupons page. |
To increase click-through and conversion rate for listings that already have good traffic |
Other Considerations |
The coupon off percentage or amount does not impact reference price. The reference price remains your selling price of sale price. |
The discounted price will become the reference price. This will impact the reference price for PED minimum discount during Prime Day and Lightning Deals. |
Which Promo Type Should You Choose?
That depends on your goals and what is important to you.
The considerations include:
That depends on your goals and what is important to you.
The considerations include:
- Eligibility criteria - Maybe your product listing is only eligible for one or neither of the promotion types. If so, there's nothing to decide between.
- Cost - If you want to minimize cost and maximize profit margin, then calculate the cost difference to use coupons vs PED, noting that coupons incur an extra $0.60 fee that is charged to the seller each time a coupon is redeemed vs PED which is free. This can add up to a significant amount if you get many sales with coupons.
- Prime Day - Are you going to run PED during Prime Day or Black Friday - Cyber Monday (BFCM)? Note that any PED you run within 30 Days before Prime Day or BFCM becomes the reference price. See section below for more info.
- Goals - Does your product listing have low sales and part of that is due to low impressions? Then consider coupons due to the extra exposure on the coupons page that could increase impressions. As shown in the screenshot below, coupons get their own dedicated link on the main menu bar, plus within the Today's Deals page, there is an additional a menu link to the coupons page. However if your listing already gets decent impressions and your main goal is to improve click and conversion rates, then PED would be more cost-effective as it is free.
Links to coupons highlighted in green.
Conclusion
In general, I would choose PED over Coupons since PED is free while you pay $0.60 per coupon redemption, as long as:
In general, I would choose PED over Coupons since PED is free while you pay $0.60 per coupon redemption, as long as:
- The intended discount amount is at least 10%, which is the minimum for PED.
- It is not in the 30 days before Prime Day AND the price with PED is not going to going to prevent me from running my intended Prime Day PED.
- The intended discount is less than 10% and the discounted amount + $0.60 is lower than the PED minimum of 10%. In such a case, it would cost less to run coupons.
Prime Member Coupons vs Prime Exclusive Discounts for Sale Events (Amazon Prime Day and Black Friday Cyber Monday)
For special events like Prime Day and Black Friday Cyber Monday (BFCM), Amazon has stricter requirements for coupon and PED eligibility. The criteria is listed in the table below.
During Prime Day / BFCM |
Prime Member Coupon |
Prime Exclusive Discount |
Fees |
$0.60 per redemption |
Free |
Minimum Discount |
≥ 20% off |
|
Seller Feedback Rating |
≥ 4 star Seller Rating or no rating |
≥ 4 star or no rating |
Product Criteria |
|
|
Benefits |
|
Event Deal badge display |
Use case |
To increase impressions, click-through rate, and conversion rate. *When creating coupon, customer targeting must be Amazon Prime members to be eligible for display on coupons page during Prime Day. |
To increase click-through and conversion rate for listings that already have good traffic |
For Prime Day coupons and PED, the stricter criteria to note are:
- Larger minimum discount of at least 20% off current price or more for both.
- At least 5% lower than the lowest price in the last 30 days.
- Your Seller Feedback Rating must be at least 4 stars to be eligible.
Coupons for Prime Day
For Prime Day, coupons that meet Prime Day eligibility criteria (at least 20% off, customer targeting set to Amazon Prime members, Prime eligible shipping, etc.) will be listed on the Prime Member Coupons page in addition to the regular Coupons page. These promo pages receive additional traffic as shoppers browse for products with discounts.
You can still run coupons with less than 20% off during Prime Day. These will still display the coupon badge, however they will not be eligible to feature on the Prime Members Coupons page.
I have a couple of ASINs with relatively low margin for which I am running a coupon but at less than 20%. These listings will not feature on the Prime Member Coupons page, but at least they will display a coupon badge showing a discount when they are seen by shoppers organically or through my Amazon PPC advertising.
For Prime Day, coupons that meet Prime Day eligibility criteria (at least 20% off, customer targeting set to Amazon Prime members, Prime eligible shipping, etc.) will be listed on the Prime Member Coupons page in addition to the regular Coupons page. These promo pages receive additional traffic as shoppers browse for products with discounts.
You can still run coupons with less than 20% off during Prime Day. These will still display the coupon badge, however they will not be eligible to feature on the Prime Members Coupons page.
I have a couple of ASINs with relatively low margin for which I am running a coupon but at less than 20%. These listings will not feature on the Prime Member Coupons page, but at least they will display a coupon badge showing a discount when they are seen by shoppers organically or through my Amazon PPC advertising.
Prime Member Coupons Page
Amazon wants shoppers to sign up as Prime members, therefore access to the Prime Member Coupons page during Prime Day is restricted to Prime members only.
For sellers, this means that to gain increased traffic from the Prime Members Coupons page, you have to setup coupons that meet the Prime Day criteria.
This feature is the main additional benefit of running eligible coupons during Prime Day.
For sellers, this means that to gain increased traffic from the Prime Members Coupons page, you have to setup coupons that meet the Prime Day criteria.
This feature is the main additional benefit of running eligible coupons during Prime Day.
Prime Exclusive Discounts for Prime Day
On Prime Day, eligible PED offers will display the Prime Day Deals badge.
This is a prominent badge that can help drive clicks and conversions.
This is a prominent badge that can help drive clicks and conversions.
If your listings have a good number of impressions, then PED can be used with the aim of boosting click and conversion rates on Prime Day.
For this year, I am running PED for most of my listings as they rank pretty well organically for many search terms and I'm also driving significant traffic of several million impressions from over 500 Amazon advertising campaigns using all 3 Amazon ad types (Amazon Sponsored Products, Sponsored Brands including videos, and Sponsored Display) at a fairly low profitable ACOS and only 5% TACOS.
Watch 2 webinar recordings and read about my full funnel Amazon PPC advertising strategy.
For this year, I am running PED for most of my listings as they rank pretty well organically for many search terms and I'm also driving significant traffic of several million impressions from over 500 Amazon advertising campaigns using all 3 Amazon ad types (Amazon Sponsored Products, Sponsored Brands including videos, and Sponsored Display) at a fairly low profitable ACOS and only 5% TACOS.
Watch 2 webinar recordings and read about my full funnel Amazon PPC advertising strategy.
Final Thoughts
A large profit margin is extremely important!
You need to have gross margins that are large enough to support running discounts that are attractive enough to drive impressions, clicks and conversions.
The minimum discount to be eligible for Prime Day PED and coupons featured on the Prime Members Coupon page is at least 20%. I have met sellers with products that have margins that are less than 20%. This makes it impossible to run effective promotions not only during Prime Day, but also at anytime, unless they offer minimal discounts such as 5% that are not very attractive, or they are willing to offer larger discounts with very little profit or even at a loss, which is not sustainable.
Whether you can even run an effective discount therefore depends very much on selecting the right products with enough margin. My own requirement is to only consider products which I can sell at a competitive normal price with a 30% margin and 100% ROI (calculated as profit as a percentage of upfront capital which is the total of manufacturing costs and shipping costs to Amazon FBA).
If you have sufficient margins, then you have the flexibility of choosing whichever promotion type you prefer and can run large enough discounts to make the product more attractive and therefore drive more impressions, clicks and sales.
You can learn more on my other pages:
If you are serious about selling on Amazon and want to have training and 1-to-1 consultations, to help maximize your success and minimize your losses and risks, check out my Amazon Seller Live Training course.
You need to have gross margins that are large enough to support running discounts that are attractive enough to drive impressions, clicks and conversions.
The minimum discount to be eligible for Prime Day PED and coupons featured on the Prime Members Coupon page is at least 20%. I have met sellers with products that have margins that are less than 20%. This makes it impossible to run effective promotions not only during Prime Day, but also at anytime, unless they offer minimal discounts such as 5% that are not very attractive, or they are willing to offer larger discounts with very little profit or even at a loss, which is not sustainable.
Whether you can even run an effective discount therefore depends very much on selecting the right products with enough margin. My own requirement is to only consider products which I can sell at a competitive normal price with a 30% margin and 100% ROI (calculated as profit as a percentage of upfront capital which is the total of manufacturing costs and shipping costs to Amazon FBA).
If you have sufficient margins, then you have the flexibility of choosing whichever promotion type you prefer and can run large enough discounts to make the product more attractive and therefore drive more impressions, clicks and sales.
You can learn more on my other pages:
- How to Increase Amazon Sales - Traffic, Click-throughs and Conversions
- Amazon PPC Advertising
- How to Create Amazon Coupons
- The tool I use to research and analyze products to sell on Amazon and to keep track of my account
If you are serious about selling on Amazon and want to have training and 1-to-1 consultations, to help maximize your success and minimize your losses and risks, check out my Amazon Seller Live Training course.