What is Amazon Prime and its importance to Amazon sellers

What is Amazon Prime and why Prime users are so valuable for Amazon sellers?

Prime started as a 2-day shipping membership for devoted Amazon shoppers, and no additional benefits were added until 2011. However, since then, Prime has grown into a subscription service with more than 100 million paid users worldwide, while the service itself has evolved to include additional perks over the years. In this article find out what is Amazon Prime and why Prime users are so important for Amazon sellers.

Amazon Prime is great value for Amazon shoppers

Nowadays, it is best known for things like free release-date delivery (where customers can make a pre-order of a new book or a hot new tech product), free 2-day shipping, free 2-hour delivery within selected postcodes, Alexa deals, whole food benefits, Netflix-style video streaming, etc.

Prime offers all this for just $12.99 in the USA or £7.99 in the UK per month. In order to encourage Prime users to spend more on their platform by buying goods online.

Besides that, Amazon heavily influences customer behaviour by offering attractive discounts and promotional rebates. Which have a significant impact on the user’s buying power.

Statistics show that the number of paying Prime members in the United States rose from 25 million in 2013 to 95 million in 2018, which represents staggering growth.

Source: Statista

Although the same percentage of growth is observed in other marketplaces. It is important to remember that Amazon's business strategy is to focus on its customers to constantly improve user experience.

What does it mean for sellers? – Prime users are more likely to buy

As was mentioned earlier, Prime customers are offered various discounts and promotional rebates. It is much easier to sell additional items or increase the basket size of your potential buyers on Amazon than on any other e-commerce platform.

Moreover, Prime users are constantly looking for lightning deals, where sellers advertise their products with the discounts. Lightning deals appear on a separate page on Amazon with increased visibility by the potential users.

Extremely high sales are generated on Cyber Monday and Black Friday days, but the most popular one is "Prime Day".

What is Prime Day?

Created in 2015 to celebrate Amazon’s 20th birthday, Amazon Prime Day is like a Christmas sale in summer. Prime Day recreates the Cyber Monday and Black Friday sales. And is one of the biggest sales opportunities for Amazon sellers. Despite being a deal-focused event, Prime Day deals are available only to Prime members.

Prime Day is the busiest day for Amazon sellers. And the best Amazon sellers are constantly looking for ways to improve their sales and Return on investment (ROI).

In 2020, during the shopping event “Prime Day”, third-party sellers got a sales increase of nearly 60% compared with last year’s “Prime Day”. The event sees heavy participation from millions of SMEs. According to data, top-selling categories of this year’s event were bedding, wireless accessories, nutrition and wellness, arts and crafts, as well as health care.

In conclusion, we’d like to quote one of JPMorgan’s analysts:

"Prime delivers such massive scale and features that we believe it would be very difficult for any company to replicate and compete against, and Amazon continues to expand and add more value to Prime by adding new benefits and growing existing offerings."

Let us know what you think of Prime’s rapid growth in popularity, or tell us about your own experience of it.

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