Amazon.com offers a number of strong marketing options for vendors and sellers. One of the more popular features is the Amazon coupon, also called the Vendor Powered Coupon (VPC). These “vendor powered” coupons have also recently extended to 3P sellers, so they’re available both in Vendor Central and Seller Central.
Like physical coupons, these e-coupons allow customers to get a dollar-amount or percentage off the regular price of the product. In return, Amazon sellers gain increased visibility and conversion.
Are coupons worth the time and expense? What are the benefits of a VPC and how can you run a successful coupon campaign?
What are Vendor Powered Coupons?
Vendor Powered Coupons are a type of Amazon promotion. They used to be only available to Amazon vendors—aka those with a “Vendor Central” marketplace. 3P sellers have recently gained access to coupons as well, though, and couponing is proving highly successful.
This promotion allows vendors and sellers to offer discounts on their products. You can offer a number of coupon promotions, including:
- Percentage off
- Dollars off
- Buy one get one
- Free shipping for a limited time
- Giveaway Sweepstakes
- Social media promo code
The digital coupons appear on the product listing and search results itself. They show as an orange banner on the product display, usually found under the reviews section in the search. This orange banner makes the promotion more visible to searchers, which increases click-through rate on SERPs.
What are the benefits of coupons?
Visibility + CTR + conversion
Your product coupon appears in three locations on Amazon:
- The “Coupons” page under “Today’s Deals”
- Search results and product display page
- Your product listing
This means three things, respectively:
- Coupons are treated like other advertisings and gain the same sort of promotional visibility.
- Customers can see coupons in search results, which boosts visibility and click-through rate.
- Customers see coupons on the product listing, which enhances conversion rate.
Coupons boost visibility, CTR, and conversion for your promotion and product.
Amazon coupons allow you to target specific types of consumers, making it the most specific form of marketing campaign without keywords.
For example, you can choose to target a specific type of high-conversion buyer. This includes Amazon Prime members, Amazon Student members, and Amazon Mom members. (Note that targeting Amazon Mom has a higher fee per unit.)
You can also choose to target “customers who have purchased certain ASINs.” This means you can target customers who have purchased similar products, complementary products, or the same products. This is a great way to encourage repeat business and customer engagement by rewarding loyalty with discounts.
You can also consider targeting “customers who have viewed certain ASINs.” This means you’re showing promotions to those searchers who have already shown interest in the product or similar products but haven’t made the purchase yet. Your promotion might convince them to convert.
If you don’t choose to target a customer segment for your coupon, your promotion will be shown to all searchers in the SERPS and product display.
Coupons are great for marketing off Amazon as well. When you submit a coupon promotion campaign, you have access to a Coupon Landing Page (CLP). This sets up a separate page with your coupons and discounts.
If you want to build your Amazon business, you need an external content campaign. A coupon promotion efficiently links your external content with internal promotions.
Plus, when a user clicks on the URL to that site, the coupon is automatically clipped and logged in their account. They don’t even have to enter a coupon code. This increases conversion by streamlining and simplifying the promotional process.
Coupons are highly controlled and flexible depending on your needs. You can offer multiple products on the same coupon, and you can run multiple coupon campaigns at the same time. You can put a limit on the number of coupons redeemed by the customer, or you can allow the customer to use the coupon multiple times.
How you choose to run your campaign is flexible with your promotion, product, and business needs.
On Amazon, if you lower your product’s price, it’s hard to raise it back up again. Lowering your price tells Amazon’s algorithm that the new cost is the value of the item. This means you may not optimize for a higher price if you later decide to raise the price. Reducing your price also encourages other competitors to lower their price. Thus, if you try to raise the price later, you may have trouble winning the Buy Box.
However, coupons allow you to temporarily offer a lowered price to your customers. This appears as a promotion, so it doesn’t impact Amazon’s algorithm.
Moreover, a reduced price appeals to the discount shopper looking for a deal. This improves visibility to a different segment of clientele who may not otherwise know your brand.
Ease of use
Customers love Amazon coupons because they’re easy to use. Consumers simply click the “Clip” button and the coupon is automatically added to their account. They don’t have to find and enter a code at checkout. This creates less friction throughout the checkout process, which helps boost conversion.
These coupons have a timeline to them. This creates a sense of urgency in your customers that can help encourage them to purchase and convert at a faster rate. This can boost product sales quickly and effectively.
Amazon offers strong metrics to track coupon performance. You can view metrics that show the number of times your coupon has been clipped and redeemed.
It will also show the redemption rate (redeemed/clipped) along with the redemption rate benchmark for similar products in that same product category. This will help you understand how well your coupon is converting. You’ll also be able to keep track of your budget spend and utilization.
These metrics help ensure that you’re optimizing your marketing and pushing your products in an effective way.
How much do coupons cost?
One of the benefits of coupons is that you pay based on coupon redemption. There is a $0.60 fee for each coupon used. Most seller coupons do not take clippings into account (though some do). This means that you almost always see a return on your marketing investment.
When you create your coupon, you’ll want to set a budget accordingly. This “budget” accounts for the total lifespan of your coupon, so you’ll want to do the math to figure out how many coupons you’ll give out versus your budget number. Your coupon will automatically deactivate at 100% utilization of your budget.
For example, you are offering 20% off your $40 item. This means that the customer gets $8 off the product. Plus, you have the $0.60 fee per coupon. You’ll deduct $8.60 from your margins per unit. This also helps determine how many coupons you can release based on your budget. If you want to offer 100 coupons, for example, you would set the budget at $860.
What are the disadvantages of Amazon coupons?
Coupons are a great solution for most sellers and vendors, but they’re not without flaws. Amazon coupons have a number of different fees to be aware of. These can include clip fees, redemption fees, and hidden fees. Also, the fees for couponing is higher in Q4 (October, November, December) or if you’re targeting certain audiences, like Amazon Mom.
Coupons are a strong promotion, but they’re not as extensive as other marketing campaigns. You aren’t boosting visibility based on keywords or searches. This means that the return can be lower than other marketing campaigns, but it’s ultimately a steadier rate of return.
How do you create a coupon campaign?
For Vendor coupons:
- Sign in to your Vendor Central account.
- Select “Merchandising” and then “Coupons.”
- Click the “Create new coupon” link.
- Download the coupon template. Populate with relevant information.
- Upload the coupon template to Amazon and sign the e-agreement.
- Amazon will review and the coupon will go live on your designated start date.
Learn more about launching a VPC here.
For Seller coupons:
- Sign in to your Seller Central account.
- Select “Advertising” and “Coupons” from drop-down menu.
- Click the “Create new coupon” link.
- Choose one of your products for the coupon. You can include up to 50 products (ASINs) on one coupon.
- Choose the discount or promotion you’d like to run, such as a percentage or dollar amount off.
- Choose the limit. You can limit it to one per customer or multiple redemptions.
- Set a budget. (Look at cost of coupons above.)
- Create a customer target.
- Schedule your ad with start date and end date. Note that if the budget runs out before the timeline, the coupon will automatically expire.
- Name the coupon. Customers will see this name, so be specific about what you’re discounting. You should include the brand, product, and product group. For example, “Save 20% on HomeRev vacuum filters.”
- Submit the coupon.
- The coupon will go live on your start date or at a minimum of 3 days.
The Bottom Line
Amazon offers a number of marketing tools, but Vendor and Seller coupons are a strong option for any Amazon brand. From the ability to target your audience to the easy-to-use “clip” feature, coupons are a strong Amazon feature that shouldn’t be ignored.
Coupons are a great way to boost product visibility, increase click-through rate, and improve conversions. This increase in sales can, in turn, enhance product ranking and reviews to benefit your listing in the long term.