Amazon sellers raise prices as orders rise before Prime Day

As Prime Day enters its countdown phase, some product orders are rising, and some sellers are taking the opportunity to raise prices. This approach may make sense when supplies are in short supply in the United States. However, some sellers are still engaged in a crazy price war, and low-price promotions on and off the site are also in full swing...

PD Countdown: Orders for some products increased, and sellers began to raise prices

This year's Prime Day will be held from June 21st to June 22nd, and there are 5 days left to the sale that sellers are looking forward to.

As Prime Day approaches, some Amazon sellers have started to see an increase in orders this week. It is estimated that Prime Day is coming soon. Yesterday, a seller said that the order volume has started to climb wildly, and everyone’s orders have increased in the past two days.

Another seller's feedback was even more direct: "I can't do anything else except packing. It would be great if there were so many orders every day."

With the good momentum of rising orders, some sellers are working hard to prepare for PD. They have increased their advertising budgets and started to raise prices every day in preparation for Prime Day.

One operator continued to raise prices after seeing an increase in orders, raising them by 1 yuan a day . Don't ask why? They operate based on their feelings. Another operator said that the price increase was 5 cents a day.

After some sellers raised their prices, they also saw an increase in orders !

As for the reason why some sellers raised their prices , it may be because they want to sell at a 20% discount during the PD promotion, and they are afraid that their profits will be lost. In fact, there should be logic for domestic sellers to raise their prices, because the American people are facing new consumption demands at this time, and many materials are in short supply.

There are crazy price cuts and promotions outside the site. Can PD make a lot of money?

Since the creation of PD, sellers of all sizes have been gearing up for this big promotion in recent years. Big sellers can make a profit, and small sellers can at least get a share of the profits. Even if they don’t participate in the flash sale, they can still sell more. However, the situation this year is different from the past. One seller said: “It seems that everyone is no longer as excited about this year’s Member Day as in previous years.”

There are three main reasons for this: first, product prices have been generally lowered, squeezing sellers' profits; second, there is a polarization between out-of-stock and redundant inventory, leaving sellers with limited room to maneuver; and finally, many Americans' wallets are empty, coupled with inflation, purchasing power has dropped sharply, and buyers who used to place orders generously have begun to be stingy, directly contributing to a decline in orders.

Can sellers make a lot of money from this big promotion?

Sales volume may be increased, but sellers are really worried about profits. Just look at the crazy promotions in full swing on and off the site.

In general, the prices on Amazon are generally lower than before. Even when sellers try to raise prices before a big sale, they only do so slightly, fearing that orders and rankings will plummet. However, not all sellers are willing to hold on to their profits.

A seller complained: "I saw a competitor's FBA. At first I thought it was a clearance sale. I clicked in to research and found out it was a new product. It seemed to have a lot of fake reviews! Is this what people call fake orders? I feel like I need to be more cautious about restocking this kind of product later! Amazon's profit margin is getting smaller and smaller! The room for loss is getting bigger and bigger!"

(Photo source: Weibo /Photo posted by the seller)

Off-site promotions are even crazier.

Now there are so many monsters outside the site that it is hard to get even 50% off. One seller was speechless: "Are the American people so picky now? In the past, social promotion codes with 50% off could quickly clear out the inventory, but now?" Social promotion codes with 80% or even 100% off are not uncommon. You are still thinking about breaking even, but your peers directly handed their knives to the buyers. How can you fight this battle?

The seller sighed, perhaps this is the internal competition among sellers on the eve of Prime Day. Now they hope that the products in the warehouse can be put on the shelves before Member's Day. It is destined to be a charity day for sellers that is not popular (maiden).

The smoke before PD

Even if it is just a volume sale, the big sale is still the most important festival for most sellers. But like in previous years, there will be some unexpected things before the big sale.

Out of stock. "The PD is almost out of stock, I don't know if the goods can be delivered in time", "It's so painful. I have been looking forward to the PD for so long, and there is a product that has been steadily shipping. In the end, the goods were stuck on the way and I missed it perfectly." Wanting to participate in the Member Day, but being blocked at the door because of out of stock, this is the biggest pain for sellers.

There is a problem with the listing. A seller complained: "I cried this morning when I found out that a listing had to undergo a safety review due to customer reviews. Membership Day is coming soon. I contacted customer service and sent an email without receiving any email. I submitted all the relevant information carefully according to the email content. I heard that the recalled products will be moved to another warehouse even if the appeal is approved. I hope this doesn't happen. I still have products on the way. Alas, it's a big blow after the holiday."

Being spoofed. A seller was furious because his product was maliciously buried with multiple banned words, including pesticides, coca leaves, expired products, etc. The seller complained: "It's really ** involution, burying so many." The onlookers were also speechless. Such a large-scale prank is really terrible.

As long as there is an opportunity, sellers will not miss the chance to make a big sale.

A seller said: "According to foreign media statistics, Amazon has exceeded 100 million members, which is estimated to account for about 30% of the U.S. population. More importantly, the spending power of members is amazing. So will you participate in the Member Day? We will definitely participate! Especially this year."

Many products are in short supply in the United States, and sellers are raising prices to prepare for PD

As vaccines are rolled out, some Americans are able to go out and spend money, and consumer demand is returning. Currently, the American people have a renewed demand for things that they didn't use during the COVID-19 pandemic.

Some home office, living room, patio, fitness equipment, pet supplies and other items are becoming scarce.

Sumit Singh, chief executive of pet-care retailer Chewy Inc. CHWY, also said a large number of out-of-stock items was a headwind in the latest quarter .

Supply and demand make it so that shortages mean price increases. Since March this year , Americans have found that cotton products have increased by 10%, furniture has increased by 3.5%, and household goods have also increased to a certain extent.

Relevant people expect this situation to weaken in the second half of this year. Before that, when domestic products in the United States are in short supply, consumers will definitely be eager to find some products that are in demand again. If cross-border e-commerce sellers have inventory and catch up with Amazon's annual Prime Day promotion, they will definitely see a takeoff in orders.

Not only are finished product prices rising, but raw material prices are also rising, with common resins used in garbage bags rising in price. Faced with rising raw material prices, some companies have announced price increases to cover costs.

From a supply chain perspective, port delays continue to have an impact and are a factor in shortages in the U.S. Some logistics companies are also facing shortages of pallets, ships and containers.

Recently, Gene Seroka, Executive Director of the Port of Los Angeles, announced that the port handled 1,012,048 TEUs last month, a 74% increase compared to May 2020. This is also the first time that a port in the Western Hemisphere has broken the 1 million TEU barrier.

Loaded imports reached 535,714 TEUs in May, up 75% year-over-year. Meanwhile, empty container volumes climbed to 366,448 TEUs, up 114% year-over-year, due to strong demand in Asia. This is the most empty containers handled by the Port of Los Angeles in a single month.

“There is no shortage of consumer demand, but there is still a shortage of labor, equipment and transportation capacity to meet that demand,” said Jonathan Gold, vice president of the National Retail Federation .

When there is a shortage of goods in the United States and consumer demand increases, the logic for sellers should be to raise prices, increase profits , and prepare for PD.