We all know that Amazon is a very competitive platform. In that case, you have to do everything to stand out. One way to do this is by running Amazon Lightning Deals to help increase your sales.
In this blog post, I will explain what Amazon Lightning Deals are, who is eligible to run this promotion, and the costs involved. I will also discuss how it differs from Amazon’s 7-day Deal and which is better between the two.
Additionally, I’ll uncover its benefits, how to create a Lightning Deal, reasons why Amazon might reject your deal, and why some sellers prefer not to run it. I will also guide you on how to decide whether or not Lightning Deals would be beneficial to your FBA business.
Read until the end to discover the possible reasons why your Amazon Lightning Deals failed so you can prevent it from happening again.
What are Amazon Lightning Deals
A Lightning Deal is a promotion offered by Amazon for a short period of time and in limited quantity. Amazon Lightning Deals usually run for at least four to twelve hours or until all deals are claimed.
Shoppers can find Lightning Deals on Amazon’s Deals pages and on the search results when they look for an item with the Lightning Deal badge.
Since they are time-sensitive, Amazon customers must complete their orders as soon as possible. Besides that, only one unit is available for each customer unless otherwise stated.
Once a customer adds the item to their cart, they only have a 15-minute window to place their order for them to qualify for the discount.
Who is Eligible?
Not all Amazon sellers are eligible to run the Lightning Deals. The minimum requirement would be for sellers to have a Professional Seller account and an overall rating of 3.5 stars minimum. However, how Amazon chooses who can run the deal is unknown.
Amazon requires sellers to pay a fee when they decide to run Lightning Deals since they are displayed on Amazon’s most visited pages. The fee starts at $150, but this can increase depending on the week you run the discount.
For instance, if you choose to run the Lightning Deal on Cyber Monday, Prime Day, or during the holiday seasons, the fee may be higher since it will receive additional exposure.
When you create a Lightning Deal, you will know exactly how much you need to pay once you select your preferred schedule for the deal. The fee will be displayed on the Lightning Deal Dashboard.
What’s the Difference Between a 7-Day Deal and a Lightning Deal?
A 7-day Deal is a time-bound, promotional offer where an item is featured for seven days on the Amazon Deals page.
Both Amazon Lightning Deals and 7-Day Deals are time-bound. The only difference is that Lightning Deals run for only a few hours while 7-Day Deals, as the name suggests, run for seven days.
The advantage of Lightning Deals is that customers feel a greater sense of urgency which will push them to purchase your products right away, while the advantage of 7-Day Deals is your product can get more exposure since it lasts longer than Lightning Deals.
Benefits of Amazon Lightning Deals
If you’re interested in creating an Amazon Lightning Deal and not sure how it will benefit your Amazon business, below are some of its benefits to help you decide if it’s worth it.
Increase Sales Quickly
Once an item gets into the Amazon Lightning Deals, it is expected to gain more visibility from discount-hunting customers, which can help increase your sales. However, do not just blindly activate Lightning Deals because you can. The cost isn’t cheap, considering that you have to pay for every item you list on the “Today’s Deals” page.
That said, it is essential to have a specific goal in mind as to why you are running a promotion to avoid overspending.
Get Rid of Excess Inventory
Do you currently have more inventory than you need? One of the best strategies to eliminate excess inventory is offering a Lightning Deal. Many sellers offer Lightning Deals to clear their inventory, especially when it comes to making room for new or seasonal products.
Related Reading: What Happens To Excess Inventory On Amazon? A COMPLETE LOOK
Amazon users don’t have to buy your Lightning Deal to be aware of your brand. Instead, they might visit your Amazon store in hopes of finding more deals. Even if they don’t buy anything in the end, it’s still a win since they are now aware of your brand.
Also, there’s a big chance that the customers who availed of your Lightning Deal will return for more. Knowing that your store offers huge discounts, they might even follow your brand.
Improve Ranking and Visibility
By now, you’re already aware that a Lightning Deal involves fees and that it is an investment you must understand to get the most out of it. However, despite charging sellers a hefty upfront fee, Amazon Lightning Deals is a good marketing strategy that you may use to improve your visibility and rankings.
The sudden increase in purchases and traffic will help you get into Amazon’s organic search ranking. It is also worth noting the valuable customer reviews you might get.
Since the customers have gotten your products at a lower price, there’s a chance that you’ll be getting a lot of 5-star ratings that would greatly help increase the overall rating of your Amazon business.
Related Reading: What Happens to Excess Inventory on Amazon? A Complete Look!
Why Does Amazon Reject a Lightning Deal?
There are many reasons why a Lightning Deal can be rejected, and here are some of them.
- Failure to meet Amazon’s price criteria. Of course, your promotional price should be lower than its original price. Your deal price should be attractive enough. Customers would love to see big discounts, and if your offered discount is not that attractive, it may not entice enough customers, and Amazon might reject it.
- If your product has a poor rating, then Amazon has the right to reject your Lightning Deal. So, be sure that the product you’ll offer has good product ratings.
- Not all products are eligible for Lightning Deals. Ineligible products include baby formula, alcohol, medical devices, medicines, adult products, and more.
- Your Lightning Deal may also be rejected if your photos have poor quality.
To ensure your Lightning Deal will not be rejected, read Amazon’s Lightning Deal requirements and eligibility and follow them.
How to Create a Lightning Deal
Creating a lightning deal is not that difficult, but since it would cost you money, I’m here to help you get things right on your first try.
Before you create your Lightning Deal, make sure you’re aware of their product requirements to avoid being rejected.
After you have successfully met the requirements as a seller, there is another step you must go through: pass the product requirements. For products to appear on the “Today’s Deals” page, a seller must fulfill the following:
- Customers must have many variations to choose from
- The product should have a sales history and a star rating that is not lower than 3
- The product shouldn’t be restricted or offensive by any means
- The product should be in a new and fresh condition
- The product should be reasonably priced
- The product should be in line with Amazon’s policy in customer product reviews
- The product should be in line with Amazon’s policy in deal frequency
You can also check your deals dashboard to see what items you currently have in the listing that are eligible for this promotion.
Related Reading: How to Sell Amazon Restricted Products and Avoid Non-Compliance
Now that you’re aware of the product requirements and you’re sure that you’re eligible to run the Lightning Deal, here’s a step-by-step guide on how to create a Lightning Deal.
- Go to Advertising on your Seller Central account, then click on Deals.
- Once the screen loads, click on Create a New Deal.
- Choose a product that you want to create a deal with, then click Select.
- Enter your preferred Schedule, then click Continue.
- Configure the deal by including the discount, quantity, and more.
- Review the deal you created and click Submit Deal.
After that, all you have to do is wait. Most of the time, a lightning deal approval won’t go past the 20-minute mark, but if it does, your product requires further evaluation, so stay put and wait a bit longer. Amazon will also pick the exact time and day your product’s discount will go live, still according to your given range.
Why Some Sellers Ignore Lightning Deals?
While Amazon Lightning Deals by itself is a good promotion, not every seller is interested in running it, and they have good reasons for ignoring Lightning Deals. Here are the two top reasons why most sellers choose to ignore it.
Sellers with limited inventory may not be interested in running a Lightning Deal, even if they are professional sellers. To get the most out of the promotion, Amazon suggests sellers have a vast inventory to cater to the massive influx of buyers. Not having enough of the product in your stock would be disastrous and would only waste your time.
The most common reason why sellers prefer not to run Amazon Lightning Deals is the costs involved. Aside from the deal fee, you need to offer at least a 15% discount on your chosen product. For instance, your item costs $30 each. If you offer a 15% discount, you need to sell it at $25.5, which is very low.
If your profit margins are low, you’ll be losing a lot of money for all the sales you make from the Lightning Deal.
How to Decide if Amazon Lightning Deal is Worth it For your FBA Business
A lightning deal is a perfect opportunity for an Amazon seller to be noticed, even in a short period. Deciding whether it is worth it for your FBA business would depend on many factors.
First, you must consider the level and size of your FBA business. Do you think the upfront fee and profit loss can be justified by the amount of traffic you’ve got from a Lightning Deal?
Let’s be honest; you will throw your money away if you use this promotion. So only do it if you think the funds you will be spending won’t impact your business. Here’s a simple break-even analysis to help.
- Subtract amazon fees per unit and get the gross profit per item
- Figure out your break-even point by determining how many discounted units you need to sell to cover the upfront fee.
- Understand and predict if selling your indicated amount is doable
- Get the number of items that you need to sell and do a quick division with your expected percentage sales increase.
- Make a comparison between that amount and your average product sales per day.
If the result of that final comparison will allow you to sell more than your average daily product sales, then it might be worth it to run a Lightning Deal.
Reasons Why Lightning Deals are Unsuccessful
Even if Amazon has approved your lightning deal, it’s still not guaranteed to perform on the “Today’s Deals” page, so there will be some cases where campaigns will be unsuccessful.
Here are some reasons why they do:
- Not relevant in the current season
- Too pricey even when discounted
- The time slot given is bad
Given that availing of a Lightning Deal would already be considered an investment, it is best to eliminate all of these problems beforehand to ensure that your campaign will yield positive benefits.
Amazon Lightning Deals is a good strategy that every Amazon seller should consider. Even with the fees involved, it is an effective and proven sales generator that creates long-lasting leads and returning clients. The secret to a perfect lightning deal placement is understanding your product’s strengths and knowing the system’s ins and outs.
Sometimes, it’s okay to sacrifice some of your profits to get more traffic for your brand. Who knows, it might just be the final push you are looking for to have your products known by many Amazon customers. So, do you take advantage of Amazon Lightning Deals? Share your experience in the comment section, and let’s see if it’s worth it or not.
Be sure also to check out my Amazon FBA guide article to learn more about the ins and outs of Amazon FBA.