2024-09-24

Amazon FBA Outlet Deals, part 1

As a product developer at TRR Designs, I list and manage our Amazon products like this one and this other one. From time to time, Amazon will offer the chance to take part in their "Outlet Deal," which can dramatically increase sell-through in a short period of time (based on my single experience with Outlet Deals to-date).

Is Your Product Eligible?

To check if Amazon will allow an Outlet Deal on your product, navigate to: Amazon Seller Central > Inventory > FBA Inventory

Then look for a button on the far right of your product(s) (when available) that says "Create outlet deal"

How is the Outlet Deal Price Determined?

Posing a quick question to Google Gemini (my new favorite tool, and the best free ai chatbot I'm currently aware of), here's its response:

If true, this suggests that your Outlet Deal price isn't required to be a certain percentage of your current price, but merely lower than the lowest price. Here's an example of what I found on my product when I tried to choose a price the last time Amazon offered me an Outlet Deal:

But some big questions remain: 

1. Just exactly whose "lowest price" are we talking about? The lowest price I've ever offered? The lowest price for this item across all time? The lowest price for this item among currently active listings? Nothing in the above-linked Amazon help page answers this.

2. Does Amazon lower their fees as well? Or does Amazon keep their fees the same, just force me to use a potentially-detrimental price? Below a certain value, this could cause me to lose money on every sale-- if the revenue does not exceed my Amazon fees (not to mention my own costs)-- if Amazon does not (do the fair thing and) lower their own fees proportionally.

Keep reading.

1. Just exactly whose "lowest price" are we talking about?

According to (many) phone conversations with Amazon's Seller Support associates, the best answers I've gotten are the following. I'm not claiming that these answers are correct; I'm simply relaying what I was told:

• Amazon searches for the lowest price, ever, in the history of your product. So if you priced your item at $0.05 in 1902, Amazon could set your max allowed Outlet Deal price to $0.05.

• Amazon also searches outside platforms (e.g. Ebay) for prices, that could lower what they allow for you. So if someone bought your item on Amazon for $10, decided they didn't like it, and then hawked it on Ebay for $5, Amazon could set your max allowed Outlet Deal price to $5.

• Amazon might even require that Outlet Deals be priced 25-30% lower than the lowest price in their records.

• I spoke with Amazon Seller support about where they found the "lowest price" for my specific case, and this is what was shared with me: "I have heard back from the investigation team and they have confirmed that this[sic] steps are internal information and we can not disclose this information."

• I've asked about, but haven't been given any information about, the "statute of limitations" in which Amazon will consider a "lower price they found somewhere else." For example, supposing you really did price your item at $0.05 in 1902, that shouldn't reasonably impact any price you're able to set in 2024. A few months to one year would be reasonable... more than a year would probably not be reasonable. But this too, is likely a part of the super secret Amazon code of secrets.

2. Does Amazon lower their fees as well?

Nope. Unfortunately, Amazon reserves the right to keep their fees whatever they want. The Amazon fees are independent of your sale price-- and this fact holds even under an Outlet Deal. Let's make it concrete: For the above item (which is real), Amazon FBA charges about $4.50 in fees on each sale. (Crazy, I know.) So this means that, unless I sell the item for >$4.50, I wouldn't even break even. Amazon is perfectly happy with this: if I agree to take place in their Outlet Deal offer, and thereby set my item to $2.99, I'd indeed have to pay Amazon a net $1.51 per sale. 

Get Help from Amazon Support

I'm just saving these links for later, since Amazon likes to obscure these links (probably in an attempt to expend as little energy as possible troubleshooting for their sellers).

Here's the link to create a new help ticket (which is used to request a phone call): https://sellercentral.amazon.com/help/center?redirectSource=HelpHub

The catalogue of FAQ/help documents/webpages can be found here: https://sellercentral.amazon.com/help/hub/reference/

Back to the list of Miscellany