Prime Day: Does it pay off for a Quebec company present on Amazon? While the annual sales event offers tons of sales, local companies manage to take advantage of them… without offering the slightest discount on the platform.
For Quebec-based Tella & Stella, offering Prime Day discounts means at least three times more sales than a regular day on Amazon. But the company, which specializes in dog leashes and collars, has decided not to offer them for the first time in six years.
“And this year, just for the first day, we ended up selling about… 2.5 times more than a regular day, which is a little less than last year,” compares Alexandre Hébert, president of Tella & Stella. An interesting difference with last year that deserves to be studied, according to him.
PHOTO MARCO CAMPANOZZI, THE PRESS
Tella & Stella’s Shop on Amazon
Amazon Prime Day is an annual sales event exclusive to Prime members, which took place this year on July 16 and 17. It accounts for 1% to 2% of the platform’s global net sales, according to CFRA Research. But while companies on Amazon have offered tons of competitive discounts during these two days for the past 10 years, they aren’t required to offer them.
Doyon Després experienced Prime Day for the first time. The company, which makes kitchen products, arrived on Amazon last November.
“On the first day, we had almost as many sales as on our own website,” explains Stéphanie Cloutier, marketing and customer experience director at Doyon Després.
If only 5% of the company’s revenue came from online sales before its presence on Amazon, Prime Day could be a game changer.
Free shipping, a key
What explains why the event is profitable even without discounts?
According to Novatize, an agency specializing in online commerce, it is the importance of the traffic generated on the Amazon site, but also the free delivery that Prime members benefit from.
Contrary to what one might think, “free delivery is by far, for Canadians, the most interesting advantage to encourage consumers to join a loyalty program, well before exclusive discounts on products,” explains François-Jérôme Gosselin, President of Novatize.
This is what a survey released by the organization, conducted in collaboration with Léger, reveals. While 14% of Canadians considered product discounts to be the best incentive to join a loyalty program, free delivery came out on top, with 35% of the votes. And seven out of ten Canadians ranked it at least in their top 3.
“Even on our personal site, people will buy more just to get free shipping,” says Stéphanie Cloutier.
Benefits, and challenges
For both Tella & Stella and Doyon Després, 60% to 70% of Amazon consumers come from other Canadian provinces. This is a major advantage for both companies.
Another Quebec company agrees. For GURU, which offered discounts for Prime Day, this is the main reason for its presence on the platform. “46 to 50% of Canadians have access to a Prime account,” emphasizes the president of Novatize.
The biggest challenges? According to the companies surveyed, these are competition, customer retention and profitability.
“Our products are heavier, so shipping costs are expensive,” notes Antoine Théorêt Poupart, e-commerce director at GURU.
The costs of selling products on Amazon, which include warehousing, shipping, and Amazon’s share, can average just over 30% per product.
PHOTO RICHARD VOGEL, ASSOCIATED PRESS
Amazon employees at work in a warehouse in South Gate, California, on Tuesday.
“What’s hard on Amazon is making a place for yourself,” says Mr. Hébert of Tella & Stella. “But since we established that we’re a Canadian company, we’ve immediately seen the positive effects in the comments and on our sales,” he adds.
Overall, the three companies surveyed are of the same opinion.
” If I am not [sur Amazon]someone else is going to be there, so we might as well take advantage of the notoriety and the benefits that it can bring us,” sums up M.me Cloutier.
Even the competition
Several retail giants followed suit and began offering online discounts…on the same two days, July 16 and 17.
According to Novatize, the online traffic generated by Amazon during the two days of sales can be beneficial for a business, even if you do not sell on the platform.
The consumer is looking to get the best deal, and before buying, he will go and compare the price offered on Amazon on other sites.
François-Jérôme Gosselin, President of Novatize
The most popular sectors during Prime Day? Household products, clothing and electronics: companies like L’Équipeur, Torréfactorie or Best Buy offered flash sales on Tuesday and Wednesday.
“Best Buy has sales on a regular basis and, yes, the 48-hour sale is on the same dates as the Amazon sale, this gives Quebecers more options to save,” reports Thierry Lopez, director of marketing and corporate affairs at Best Buy in Quebec.
According to Adobe Analytics, shoppers are likely to spend approximately $14 billion during Amazon’s Prime Day event. That’s a 10.5% increase from Prime Day 2023.