How Amazon selects its seemingly random offers of the day. And why are sellers chasing them like that?

Amazon has captured 50% of the internet market in America. Last year, over the five-week period of Thanksgiving Day (November 22 in the US), this one online store accounted for 89% of the expenses of customers of the largest trading platforms in the States. For 2017, the company's shares rally by 55%, in 2018 - another 30%. The reason is simple: the company has the best infrastructure, plus it knows what to give to customers. Independent salespeople, third parties, provide up to 70% of purchases on the site. And the company needs to know which of them to issue in the search results, and which ones to arrange discounts.

Of the hundreds of millions of goods placed on the site, every day the company selects only a couple of thousand. What parameters does the company use to ensure maximum sales? How to choose this 0.1% of suitable things? Or take goods at random, risking to disappoint buyers?

A few months ago, Tea Forté , which sold expensive tea bags and special tea cups, won the jackpot. Its infusors, tea samplers and tea mugs chose Amazon as one of Cyber ​​Monday's offerings. This simple whim of the algorithm allowed some products to rise from # 588 to # 4 on the grocery list on the site. And in a few days brought the company in the amount of almost $ 450 thousand.

Jürgen Nebelung, Vice President of Tea Forté, could not hide his joy:

For us, getting into the list of recommended, especially for day discounts, is always a gigantic thing. We reduced revenue per unit of goods by 35%, and were able to sell 6.5 times more goods than usual. We seemed to be under water, and surfaced to get some fresh air.

Tea Forté is one of more than two million independent sellers on Amazon. With such a huge competition, many of them agree on almost everything to get the eyes of buyers. One option is to buy ads from Amazon itself so that you can be put in the top of the issue with a “Sponsored” plate. But in this case, to get income is almost impossible. Companies do this in the hope of earning a first base of loyal customers and starting word of mouth, although there are few chances.

Much more profitable way - to get into the issue due to its discount. So you can even find yourself in a special section of the best deals of the day , so even those buyers who are not looking specifically for your product can see it and think about purchasing. This will increase the seller in the rating and help him in the sale of other products - for several weeks or even several months. It is possible to sell one category of things at a sale to the minus, but due to this, you can earn a reputation and raise other products in the site’s output, so that a good profit will result.

At other sites, not arranged like Amazon, this scheme could only bring losses. But since Amazon takes into account a wide variety of metrics, it’s quite possible to launch a cascading effect here. If you become noticeable - they buy you - they give you feedback - you earn a rating - you get into the top of your category - you are provided with clients and orders for the next few years. The dream of every little seller.

In order for your product to consider the algorithm that determines the main stocks of the day, and you hit the cherished page , the discount must be at least 15%. If more - a chance is higher, plus you can highlight one of the first places. And only a real reduction fits: Amazon keeps track of whether you had sales at previous prices, and how much such prices were kept before. With fake discounts like Aliexpress sellers, it won't work.

You must specify a certain amount of goods that you are willing to sell. The number can not be less than 1000. So that competitors do not overlook the strategies of other participants of the site, this number is not shown anywhere, only the percentages. If the client sees that 90% of the goods have already been bought, he realizes that he has little time left. By this percentage, he can also estimate how attractive the discount was to other buyers.

Thanks to this trick, the buyer always remains in profit. Sellers, naturally, would like to show that they always have “99%, literally one item left, fly in!”. But they can only sell the amount that Amazon indicated in advance. So in the section of shares more often there are just low percentages of the goods sold. Sellers want to beat off discounts with the highest possible sales for their few hours at the Sun, and rarely set the minimum amount.

Attempting to get to the offer page is always a risk. It can take only a week between submitting an application to Amazon and starting to sell a product. Therefore, many sellers stock up on inventory in advance, and send tons of their goods to the Amazon warehouse before receiving a response. If you still do not get to the top page, and there will be no sales, payment for warehousing and delivery, not to mention the production / purchase of thousands of goods, may bankrupt the company.

Traditional supermarkets and online stores, like Macy's, Target and Best Buy, love to arrange discounts on a certain category of goods. Amazon, on the contrary, is always trying to make a hodgepodge. Discounts at the same time go to the most different things, even those that are not so often searched by buyers. The main thing is that the goods do not directly overlap, the price was well reduced, and the seller received positive reviews and provided a sufficient amount of goods to the warehouse. Then it remains only to put forward the most purchased and clickable options ahead, and to put less-used options on a tenth to twentieth page.

Five days after Thanksgiving in 2018, independent companies sold 140 million items on Amazon. Over the past year, they earned about $ 260 billion at the site. This is more than the GDP of many countries (for example, Greece, the Czech Republic or Portugal). But on average, each individual company accounts for only $ 110,000 in sales. And this is considered only “professional” sellers who pay a subscription to Amazon and sell more than 40 products per month.

Only 3% of Amazon merchants make more than $ 10 million a year. These are mostly promoted brands. The truth is that many of the smaller companies also exhibit their products on eBay and Jet, and in the past two years at Walmart. From there comes an additional profit, while the possibilities of popular offers of the day on Amazon are used to unwind and become visible to the market.

On Cyber ​​Monday, Tea Forté exhibited eight products at a discount from $ 10.40 to $ 19.25. At peak times, she sold one item every three seconds.

Coffee Gator has put out three of its devices for brewing coffee. She lowered prices by about 20%, from $ 42 to $ 32, and in one day in December sold 3,500 units, 5 times more than usual. Company founder Phil Williams says he has been preparing for this day for more than two months - by offering Amazon a discount volume, he immediately ordered the production of a large batch of his devices and started working on their delivery.

Jason Beuys, a top manager at Dazadi.com, a site selling various training and game accessories, always drops 15% - because, as he says, most of his products are so unique, so he doesn’t have much competition on Amazon. Now most of the company's annual sales, about $ 20 million, are accounted for by Amazon. Talking about why he needs to sit on such a platform, having his own relatively popular resource, Jason Beuys answers:

The Amazon section is now one of the most popular pages on the Internet. It’s as if you’re hanging on top of Google, it’s not priced. Every time we appear there, I feel a lot of new eyes looking at us.

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