For many e-commerce businesses, there really is a Christmas in July, courtesy of Amazon.
Prime Day, which is the Seattle-based e-commerce giant's fourth annual sales marathon boasting Black Friday-style doorbuster sales on everything from toilet paper to fidget spinners, will kick off this year on Monday, July 16 at noon. Participating vendors will get a chance to have their wares peddled out before an estimated 100 million Prime members over the course of the sale, which lasts 36 hours.
The made-up shopping holiday has delivered a veritable sales bonanza for vendors in years past, and this year should be even better, suggests Amazon. During last year's sale, which lasted 30 hours, customers ordered more than 40 million items from small- and medium-size businesses.
Inc. checked in with several small Prime vendors to get a sense of how they're preparing for the onslaught--which should be instructive for any company girding for a big sales event. Here are their top five recommendations.
1. Promote! Promote! Promote! (Outside of Amazon)
Prime Day brings millions of deal-hungry customers to Amazon's site, but ringing up big sales is hardly guaranteed. You'll need to spend some time marketing.
Start with your own website. Tomofun, the Seattle-based maker of the Furbo dog camera, is prompting clients to sign up for updates on its website for the "biggest sale ever." Maggie Cheung, co-founder and chief marketing officer at the company, says she's also planning to use influencer campaigns on Instagram to build consumer awareness.
Consider social-media channels too. Phil Williams, founder and CEO of Coffee Gator, an e-commerce site that sells coffee-making gadgets and accessories, says he's running Facebook ads on top of promoting the sale in his business's newsletter. Based on previous years, both companies are expecting to make at least 500 times more than what they'd normally sell on any other day.
2. Beef Up Your Support Systems
"I better make sure that we have enough servers on our website to make sure that we don't crash," says Truwomen's president, Rafferty Jackson, who is brand new to Prime Day. This year, the L.A.-based nutrition startup is planning major attention around two of its vegan protein bars.
If you're participating in Prime Day--no matter if it's the fourth or the first time--you should expect a peak in your website traffic, Jackson says, as customers will likely go check you out before they buy your product.
You also want to make sure you have enough people on customer support, says Victor Chang, Tomofun's co-founder and CEO. He adds that the members of the company's support team speak multiple languages, as their dog camera will be available in 10 different markets, including China, Japan, and Europe.
3. Bundle Items, Keep Prices Competitive
Some critics compare Prime Day to a digital yard sale, meaning that the products on sale are not necessarily the ones consumers want to buy. Indeed, several business owners mentioned they are planning to use this opportunity to move lagging inventory, which in some cases they have already written off as a loss. But if customers are still not biting despite deep discounts, you could try bundling loss-leading products with other items.
"[Bundling] means that you're not competing directly with anyone else on price," says Katie May, CEO of ShippingEasy, a shipping software maker based in Austin that also works with Amazon sellers.
Also, don't try to go too low on your prices, recommends Michael Dweck, founder and CEO of New York City-based apparel startup Basic Outfitters. "Customers are looking for a good deal and [that] doesn't necessarily mean the steepest of discounts," says the Prime Day seller.
Instead of trying to undercut rivals by selling at a loss, Dweck says that this year he wants to use the exposure from Prime Day to lure in new clients who will hopefully become repeat customers. "You don't need to sacrifice margins and margin dollars," he adds.
4. Don't Sell Out
Selling out of merchandise in a single day is a very real possibility on Prime Day. And though you may have it on your bucket list, many business owners caution against it.
"Once you run out of stock, it kills your listing," says Lawrence Bibi, founder of New York City-based Light Accents, a home decor business that's participated in the sales holiday since Amazon first launched it in 2015.
When an item is marked as unavailable because there's no more inventory to ship, its ranking on the search page will drop, says Bibi, who had this experience last year. Even after you restock the item, you'll need to work hard to get the listing back to that first results page, adds the Prime Day veteran. Amazon confirmed a seller's ranking will be negatively impacted if they run out of stock.
With this in mind, David Simnick, co-founder and CEO of Soapbox, a soap and shampoo maker in Washington, D.C., stresses that you should stock up not only for Prime Day, but for all days after as well. Don't go overboard, he warns, unless you want to risk becoming cash-strapped and stuck with a bunch of unsold inventory.
Just make sure you're investing an amount you can afford to lose if your inventory doesn't sell, suggests May from ShippingEasy. You also need to factor in any additional costs, such as storage fees. Note that Amazon recently introduced a new policy that penalizes businesses that store products in its warehouses for too long, so you'll want to watch out for that too.
5. Have Flexible Expectations
No matter how much you prepare for it, there are no guarantees, says Williams from Coffee Gator. "You have to be comfortable with the unpredictability of it," he adds.
For Repurpose, an L.A.-based company that sells eco-friendly, compostable tableware, the pay-off hasn't been there, even though Amazon is one of its biggest sales channels overall. This year it decided to skip Prime Day.
"It's a guessing game," says Corey Scholibo, Repurpose's co-founder and chief marketing officer. In the past, Repurpose's Prime Day deals have run at 2 a.m., he says, which have not generated the expected sales.
"Amazon has a lot of different marketing channels to experiment with," says Scholibo. "I can't say that I wouldn't re-experiment with Prime Day in the future," he adds.