In today’s podcast episode, Dave and I do an apples to apples comparison of earnings over a week-long period, beginning on July 9th.
In Amazon US, my products had a 158% uptick from July 16 to July 17 (actual Prime Day) compared to the same days during the previous week. Dave got a 160% uptick for his products on the same dates.
The disparity between our numbers was greater in Amazon CA. Dave got a 788% uptick in his product sales, while I had 74%. The Canadian obviously had home advantage.
Dave, who has never tried running a Prime Deal (and probably never will), believes that it is better to just “ride the Prime Day wave” because you are going to get a sales boost even without a deal.
The numbers we came up with are providing substantial evidence to support this. While the item that we had a Prime Deal for predictably sold a lot, it would still have done well without it, and we wouldn’t have needed to subtract the cost of being able to participate in the Prime Day in the first place.
Thanks for listening to this episode! If you have any questions or comments, feel free to leave them below. Happy selling!
Full Audio Transcript
Mike: This is Mike, and welcome to episode number 164 of the EcomCrew Podcast. Today, I have my trusty partner in crime, Dave Bryant back with me. And we're going to be talking about Prime Day today kind of doing a Prime Day recap and evaluating the results after the dust has settled here in the early going. We recorded this episode the day after Prime Day and we're putting it live the Thursday after Prime Day. So, we don't have full stats yet, but we have a lot of information so far.
I think you guys are going to enjoy this just to see what our sales were from our perspective. And even if you don't sell on Amazon, you might find this interesting. We reveal our exact sales both of us both in Canada and in the United States in the days before Prime Day and the days after Prime Day or the days of Prime Day. So without further ado, let's jump right into it right after this intro.
Dave: This is Dave.
Mike: And this is Mike and welcome to this edition of the EcomCrew Podcast. How's it going Dave?
Dave: Going swell, just recovering from Prime Day, how about you?
Mike: Yeah, same thing. And it's another Amazon episode we just did. The last one we put out was about Amazon as well. But this one is more specific. This is about Prime Day. We're recording this the day after Prime Day and it's going to go live two days after Prime Day. But I think it's always good, like right after the dust settles to go over some stats and stuff. So there's a bunch of stuff we want to get into. Let's dig right into it. I guess the first question because we didn't talk a whole lot about this before hitting record, other than going over some stats. But my first question is, did you actually have any prime deals running this year Dave?
Dave: No. I mean, in my 10 years basically selling on Amazon we've never done any prime deals, either in my current company or previous company.
Dave: Yeah, with that being said, Prime Day is kind of this new festivist [ph] holiday. Amazon has created them in the past two or three years.
Mike: It’s festivist for the rest of us.
Dave: Yeah, so it's only been around for two or three years, I guess in kind of its really dominant form. But yeah, either way, in any form of Prime Day, we've never done any deals.
Mike: Interesting. Okay. So last year, we had a prime deal up, it's kind of funny, I remember we were up in Alaska. And I kind of forgot about Prime Day. We were like, 10 days into this multi week trip and I hadn't had cell phone access for like three days. And we're coming down the parks highway and finally got back on cell service. I opened up my Amazon app. And we had $50,000 in sales.
And I was like, what the heck is going on here? And we had put up a Prime Day deal for 1,000 units of one of our products. And it's sold through like before the deal was even over. So, last year was kind of our first taste of Prime Day. We hadn't done any — I don't even know if it existed before that. We weren't really serious about selling on Amazon really much before that anyway. And yeah, I mean, it was crazy.
So this year, I'm like, okay, well, Prime Day we got to make sure we're all lined up and ready to go. And we'll kind of get into like how all that went. But we did have one — we ended up with one Prime Day deal that was approved. The other ones they threw on like prime week, and then one of them got canceled, and a couple other annoying things. But last year, kind of like letting the cat out the bag here did definitely did better than this year. And we'll talk about some of the other numbers as we progress here.
Dave: Yeah, and I think we come from a little bit different perspectives here. My theory is that with Amazon, obviously, you have no lifetime value of a customer. Most of us in e-commerce are working on pretty razor thin margins to begin with. I don't really know anybody making 50 or 100% margins, net margins when they're selling on Amazon.
So, I think the room to do that type of discounting is really small. And I think once we talk about the numbers here too, I think we can kind of show that even without discounting on Prime Day, you can still have pretty good results. So if there is any merit in actually heavily discounting on Prime Day, I think that we can at least give a counter argument to maybe not actually being worthwhile, maybe just ride Prime Day through and don't do any discounting and just take advantage of the rising tide?
Mike: Yeah, and I mean, I think there's other reasons why. I mean, the one thing that I want to talk about here for that reason is inventory planning, because if you want to have a deal on Prime Day, you can't wait to submit a deal and hear if you're approved, and then be like, okay, well, I'm approved for this deal, I need to have an extra thousand units of inventory. That takes another three months so that they commence. So, you have to bet on getting a Prime Day deal approved before, like well before Prime Day comes. So like you've already ordered extra inventory, betting on the calm that you're going to get approved for Prime Day, then when you don't get approved for Prime Day, now you have extra units inventory laying around that you don't need.
Dave: Yeah, and the other problem with Prime Day and Lightning Deals is that they are pretty picky about what products they ride in, and you have to have certain demand for it. So ideally, you can just prime data load and liquidate inventory. But that's not always possible with a lot of inventory because Amazon simply won't accept it. They want your best selling units to be offered as Lightning Deals.
Mike: Yeah, you'll definitely only get things that have established track record and stuff like that approved for sure. So yeah, I mean, I'm kind of I’m on the fence because, like, let's talk about the economics because that's the first thing you brought up. So, in the economics front, for me, I think it's worth it. What I did is, I looked at the one prime deal that we did have up there, which was from one of our sets of gel pens. And so first off, it's $750 fee, just to be able to launch the prime deal. And we were giving 20% off of the item.
So, I looked at our cost of goods landed and everything. And just to break even, just to pay for the fee of the prime deal, we had to sell 150 units, and then anything over above that, then we are making a profit. And then obviously, like, we're making a significantly less profit on those items on those sales than we would otherwise. But the deal that we had up was for 1,500 units.
And in my mind, had we been able to actually sell through all 1,500 of those units, it would have absolutely been worth it. Because I do think that there's a halo effect for us, because we are working on branding and stuff for ColorIt. They buy the product and there's refills and another set that we offer and another set that we offer and books and stuff like that. And we've spent a lot of time recently like analyzing our Amazon sales and we do see a lot of repeat business. There are definitely a lot of people that buy stuff on Amazon.
Now whether they're coming through our ecosystem first and then landing on Amazon, or they're coming through Amazon ecosystem first, and then finding us and then doing repeat sales, I don't know the answer to that. But there is like a really good repeat buyer opportunity for us with those products. So, in my mind, it's worth it. If I can get 1,500 people to get my product in their hands, it's well worth it for me on the chance that 5% of them or 10% of them, or whatever become fans of ColorIt for life kind of thing, versus some of our commodity products like our ice packs like I would never put those on a prime deal.
Dave: Yeah. This is kind of my philosophy doing this for a number of years is that when you actually start cranking the numbers and doing the lifetime value, what is the lifetime value of your customers, what percentage of them are repeat customers, I think you might even find I know, I've definitely found this in every brand that I've been a part of is that the repeat customers, maximum we get is about 5% of overall customers. And that's actually hard numbers doing the math lifetime value of a customer. Obviously that's going to change for everyone.
But when you do the math, that incremental cost that you have trying to acquire those new customers and if you're having to do it through discounting, it's rarely worth it unless you're selling something like razor blades or some cosmetic product where somebody is buying the same product two or three, four times a month. If you have your typical product, in my opinion, if you're primarily Amazon, I don't know, that lifetime value of customers is not high enough to warrant really heavily discounting to go after them.
Mike: I agree. I mean, I feel like ColorIt is closer to that razor blades thing, though. So from — I don't know, I mean, it's not quite to that level. But I do think that it's on that end of the spectrum, versus I agree that all the all the things that we sell, at least to this point, don't have that effect. So it wouldn't be worth it.
Dave: Yeah, I would challenge you actually. And this probably goes for all listeners, actually track that metric. It's really easy to get like this intuitive feeling and think, oh, yeah, I think we have 20% repeat customers. But if you actually track it, and I know in our order management software Linnworks, we could actually track this. They actually track the overall percentage of repeat customers rather than just trying to give a guess feel for it. You might be surprised by the number. That's my opinion, I could be completely wrong. But in three or four different brands that I've managed now, that's my overall consensus is that the number of repeat customers even for a really sticky business like boating and offloading, it's still a really low number.
Mike: So on ColorIt.com, it's over 50%.
Dave: But what percentage of your overall business, so if you take into account Amazon and ColorIt because obviously ColorIt is not 100% of the business?
Mike: No. So I mean, I'd have to — I don't know how to run that report. I have to figure out if Scubana can get me that info and I'll report back on that. It’s definitely interesting to find out what that percentage would be for sure.
Dave: Yeah, and I think definitely for ColorIt through your own website share, you can do a lot more marketing tactics to try to acquire that customer because they are yours. But on Amazon trying to acquire those customers and hoping that they somehow trickle back to become your customer, whether they're repeat buyers on Amazon or through your own website, I think that's a tough proposition. Definitely on your website, trying to spend a little bit more to acquire those customers, yeah, for sure it makes sense. But Amazon I don't know. I think it's just a losing proposition.
Mike: Okay, got you. All right, so let's go over the numbers because actually, the thing that's interesting about this, your theory based on what you're saying is that just ride the wave, the prime wave and don't do discounting. And it's something I might definitely be thinking about next year. For me, I think the biggest reason why I'm not going to be to all in on Prime Day next year is just because of the logistics and inventory planning.
I am definitely in a little bit of a bitter mood right now, because of how the whole prime deal selection thing went. Again, you still apply for it, I forget the exact month, let's say back in April, or whatever it was, they don't even tell you when Prime Day is going to be until like a couple of weeks before. So, you don't know the exact date. We sent inventory in ahead of being approved because it takes so long to get inventory actually in Amazon's warehouse this time of year.
The deal that we actually ended up doing I was worried was going to get cancelled, because as of Friday, the stuff hadn't even been checked in yet and the deal was on Tuesday. It did get checked in late Sunday night, early Monday morning and we did have the units available. But again, we had on our forecast and as a part of our whole inventory and logistics plan for selling through 1,500 units of each of the Prime Day deals that we had submitted and figured they were both going to get selected because the one that didn't get selected was actually one that was a Prime Day deal last year. So, I figured it was a shoo in to be approved this year and it wasn't.
So I think, for those reasons alone, like next year, we're going to handle it much differently, either by not submitting Prime Day deals at all, or doing it for other strategic reasons. We'll put them up there and it's yet to be determined. But kind of again, letting the cat out of the bag here, we had a great uplift as did you just riding the Prime Day wave even on items that weren't on Prime Day. So, let's go over your numbers first Dave. So, let's just kind of review, try to do apples to apples. So, the Monday before in the US, the Monday before, which would have been, what was it? Like June 9, or something like that and 10th. So, the Monday and Tuesday before, like, what were your sales then and then we'll compare what you did on Prime Day.
Dave: Yeah, so obviously my numbers are going to be way smaller than yours. But this is also a really good reference point for people listening because some people have larger brands, some people have smaller brands. But last Monday and Tuesday, it was $854 and $1244 respectively, and this Monday and Tuesday, $2,128 and $1344. So relatively, that was 150% increase Monday to Monday, and just barely a 10% increase Tuesday to Tuesday.
Mike: Yeah, and what's interesting is that Prime Day was billed as the 17th, which was Tuesday. But from what everyone's telling me and from what I've also noticed, like our deal didn't really do all that well, because I think it was at the end of the Prime Day on the 18th. But it seemed like the Monday deals did better, like people kind of saw Prime Day in its starting and the excitement being around that. And we had a big uptick on Monday as well.
Dave: Yeah, and I think that's the benefit of all this advertising and marketing that Amazon is doing. They're pumping it basically the weekend before and they're pumping just Amazon Prime Day, Amazon Prime Day. And so they're getting obviously it seems to be a lot of uptake in traffic on that Monday, even if you're not doing deals. So yeah, again, even if you're not doing deals, which technically take effect on Tuesday, you're still getting that uptick in just Amazon traffic, but all of a sudden surging on Monday because of all that advertising that Amazon has been doing in the run up to it.
Mike: Yep. All right, so let me go over my numbers here. So, last Monday we did 14,588 and the previous Tuesday was 14,561, like they’re really similar. I mean our sales are actually pretty consistent. This is not atypical. We have a couple of days of the week that don't do as well as others and usually one day of the week that does better than others. But Mondays and Tuesdays are usually pretty consistent days for us. And then this Tuesday with no prime — I'm sorry this Monday I apologize, this Monday the 16th with no prime deals running at all, we did 21,680.
So that was a 48% uplift in our sales on the beginning of Prime Day, whatever you want to call this thing. And again we had no deals running; we didn't do anything special or anything like that. I mean we had PPC running and things like that, but we didn't change our budgets and stuff which is one of the things that Amazon was recommending which was funny to me, because basically their recommendation was for everyone to pay more.
Dave: Spend more money and slash your prices.
Mike: Yeah. I mean it was kind of comical; actually we had a phone call with someone at Amazon about this. They sent me an email and I actually I fell for it. I usually don't fall for their marketing emails, it's pretty funny. But yeah they had sent an email saying, be prepared for Prime Day and blah, blah, blah. And I thought it was going to be getting more deals submitted and getting like preferential placement and things like that. And I get on the phone with this lady and literally like the entire call was, you should turn the plus on for everything for Prime Day because other people are going to be paying more and you don't want to miss out on the traffic. And I'm like…
Dave: It's like those — sorry go ahead.
Mike: I was just like if everyone is paying more, then like just everyone is paying more, like it isn't like anyone is getting more exposure.
Dave: Yeah it's like those old Google AdWords account reps that would give you a call every two or three months and help you optimize your account, really they're just figuring out a way to get you to spend 50% more on everything.
Mike: Yeah exactly. So that was a complete loss. But anyway, so then this Tuesday for Prime Day, well what I considered to be prime Day, I guess it was Prime Day 2.0 or whatever, 1.5. We did 31,809 which was 118% uplift to the previous Tuesday. But we had a prime deal running. So, the bulk of that was from the prime deal. We sold 306 units through of that item I was talking about, which again, for me was a big disappointment. And the one number that I didn't grab, let me get that right now, just to get the value of that. It turned out to be $70,300 in sales.
Dave: From the prime deal.
Mike: From the prime deal. So if you subtract that out, like let's just assume that we didn't do that, we would have been at let's put that, will work out to like 15,000ish, about 14, 15,000 — I'm sorry, 24,000 I meant to say. So, we still would have had a really great day. Like, I mean, Prime Day would have been a great day either way. So again, like kind of to your theory Dave, maybe it's just worth just riding the wave and you just get more sales that day. And if you extrapolate, I mean, it's from an ego perspective, it feels awesome. Like, you put up this prime deal, and you sell 300 units, which seems good in a vacuum.
Let's just say you sell 1,500 units, you throw up these like huge sales numbers of 30, 50, $100,000 in a day, whatever you might do on a crazy Prime Day, but like how much margin are you sacrificing, and if you run it side by side comparison where let's just say for instance, we had “only done $25,000” yesterday. We would have still sold more of this product. Let's just say we did $25,000 yesterday, would we actually have made more money? The bottom line is like, would we actually have made more money. And most likely, yes.
So I mean I don't need to really break out a spreadsheet for this because we were giving up $750 in margin right off the bat, just to be able to play the game on the prime deal. And then we were giving up $6 a unit margin on every unit that we sold. Pretty quickly there like, we would have been better off just not even running a prime deal and just being in the ecosystem of Amazon when all those eyeballs were there. And it's hard to know, I'd have to go through and look at all the prime deals.
We do get a decent number of spillover traffic. Like our listings, people will go on one of our listings, and we actually added a table to the bottom now with one of the enhanced brand content units and we do see people buying multiple items per order. So, if there was — I have to go back and analyze that pretty heavily. But I looked at it as a cursory look last night, just kind of going through our account, and the bulk of them were just people buying just one set of the thing on prime deal and that was it.
Dave: Yeah, you were not getting necessarily that greater cart value for people buying the prime deal and then also buying some other items with it.
Mike: Yeah, not to the level that I think would move the needle to make it worth it. So I mean, I think really at the end of the day, after analyzing all this, just as the dust is just now settling. Realistically speaking, we would have been better off just not doing Prime Day.
Dave: Yeah, I mean, I think either way, you have to know your numbers 100% dead on. I think you're — I mean, I know you relative to a lot of other e-commerce entrepreneurs actually know your numbers and profitability per unit dead on. I know a lot of other people though; they don't necessarily know their product profitability. They're simply looking at their price, minus the cost of goods, and maybe minus shipping, and they're ignoring all the other costs, customs, storage, return rates, shrink rates, all this and that. And I just don't ever want to personally be in this position of doing a massive amount of revenue and then finding out at the end of the day that, hey, I was selling those items actually at a loss and actually lost money on all this marketing that I've been doing and all this advertising.
Mike: Yeah, no doubt about it. Yep. Cool. So one last thing we wanted to talk about was Canada. Did Canada Prime Day have an equal result? I mean, again, for me, we did 48% of our typical, I've had a 48% uplift on a typical Monday, 118% uplift on a typical Tuesday. Again, the prime deal was in there. So it's probably if we weren't doing that it was probably something in the 50 to 60% range. So, let's talk about what Canada did. And both of us have much smaller numbers here, for obvious reasons.
Obviously, Canada is much smaller than the US. For me, we're just getting started in Canada this year; we just threw up our initial stuff. I am happy to report that we have broken five figures a month in Canada now. So, it is starting to add up to something significant, six figures a year of additional sales, and I just see that continuing to grow month over month, which I'm excited about. So let me go over my numbers real quick here.
Dave: And I think before you start, there's one important thing to mention here is that my Tuesday Canada sales actually exceeded yours by…
Mike: By $1 and 29 cents.
Dave: I'll take it.
Mike: The Canadian was able to beat me in Canada.
Dave: I know, I know. We’ll have a hockey match next week.
Mike: Nice. I like hockey. I used to play hockey.
Dave: I know, you actually [inaudible 00:22:54]. I was shocked when I’d seen all these Washington capital tickets plastered around your house.
Mike: Yeah, not a big hockey fan but that's not what we're here to talk. We're not here to talk about A's and…
Mike: Yeah, and stuff like that. So yeah, so last Monday and Tuesday, Canada, and it's interesting that both days again, just kind of like they are in the US were pretty similar, so $529 and $564. And then looking fast forwarding to the prime days, 676 and 828. So, 27% uplift Monday over Monday. And 46% uplift Tuesday over Tuesday.
Dave: Yeah, for me, it was $69 and 99 cents on the previous Monday and $559 on the Tuesday. And on during the prime week, $589 on prime Monday and $829 on prime Tuesday, which was a 740% gain for Prime Monday, relative to the previous Monday, and 48% gain on the Tuesday.
Mike: Yeah and it sounds like that Monday like there's just wild variants there, because it sounds like you had like a bad Monday.
Mike: And when you're doing these lower volumes, like just getting one or two orders more or less on either direction can really throw out these stats.
Dave: But I think overall, I mean, it's pretty consistent the numbers here is that sales or no sales Canada or the US, you're getting a big uptick on Amazon on that Monday and Tuesday, regardless of whether you're doing deals and again, regardless of the country.
Mike: Mm-hmm yeah. So, the last thing I want to ask you, Dave, on the Black Friday deals or whatever they call them on Amazon, is it Black Friday deals or I think it's a Black Friday deal, right?
Dave: Well, we have no Black Friday deals in Canada. We only have Boxing Day.
Mike: Boxing Day deal. So those I'm sure that that does really well. But in the US, Black Friday deal, I think they call them Black Friday deals. We ran one or two last year, so the question I have for you is, are you going to apply or try to run any of those or are you just going to ride the wave?
Dave: Well, the issue is that we're roughly a summer and spring company offloading products. Yeah, traditionally fair weather products. So, I expect the winter in the fall months won't be that strong for us anyway. So, I don't think there's any really gain in doing Black Friday deals because I think people need the products at that point. They need them, discounting them is not necessarily going to incentivize them to buy them.
Mike: Mm-hmm. Yeah, okay. So for me, man, it's tough, like I need a couple of days to kind of detox from this. But I think that like going into it, we're just not going to do them. But we will strategically do them if necessary. And I can see on the horizon, just some of these products that we have, that we have a little bit extra inventory on, there's been a couple of products that first of all, the ones that we just sent Prime day deals for, we have extra units for, and we got to see kind of how that from an inventory planning standpoint through the rest of the year where we're at around that time.
And if there's products that we have an abundance of inventory for that are that are also good sellers that we want to kind of trim down, we'll be looking at that. Because one of the things that we're — and it's another whole episode, I don't want to open Pandora's Box here. But one of things that we're really looking at is our inventory turns and an efficiency of the inventory that we have. I mean, we have over $1 million in inventory now which is just a crazy scary number.
And getting let's say a 10% efficiency in inventory performance, it's $100,000 in additional cash flow we can unlock to either grow our business or just have less cost of money or whatever way you can look at it either from other angle. And the days of just ordering a full container of it because it's a little bit better price or because we just want to make sure we don't run out are kind of over and we're getting more sophisticated with looking at time cost of money and like cash flow utilization and stuff like that. Because there's a crossover of yes, when you order at a higher volume you can get a lower price a lot of times from manufacturers, but if you're holding that inventory for an extra two, three, four months because of that lower price, sometimes it's actually worth it to just pay more for the inventory.
And so, we're looking at trying to do like overall total analysis. It's probably something we can do like I said, do a full episode on. It's going to get really interesting. I'll get Jacqueline to come help us with that when we complete that analysis. But any rate, I mean if there's reasons for that where we sit down and go, okay, it makes sense for us to run some prime deals just to kind of help with that situation, then I think we'll do it. But otherwise what it's looking like is that maybe we're all suckers for setting these prime deals.
Dave: [overlapping 00:27:49].
Mike: Yeah I mean it's exciting, right?
Dave: Yeah, I was just going to say the other issue too with Black Friday that Prime Day doesn't have is that storage rates are four times higher during Black Friday.
Mike: Yeah, exactly. And if you send inventory in hoping to get approved because you get to send the inventory in well in advance of being approved, and especially that time of year. So, you start sending inventory and then you don't get approved for the deal and it ends up sitting there longer at a hundred and whatever dollars a pound it works out to or $200 a pound. It gets really expensive. I think it's close to $200 per pallet basically to store stuff in Amazon those three months.
Dave: Yeah, it’s crazy.
Mike: I mean then that's another cost right that you don't think about.
Dave: Yeah, make sure you have your spreadsheets taking that into account when you're doing your profits.
Mike: Cool. So let's end this episode with a little plug real quick for EcomCrew Premium. It's been going really well, it's exciting. We've gone through our first few months of doing our monthly Q&A and monthly behind the scenes webinars. So that's been going really cool. If you are interested in doing that, go over to EcomCrew.com/premium. We have a monthly and yearly subscription. And as a part of that you get access to both Dave and I through email, through the monthly Q&A webinar I just mentioned. We stay on there usually for about 90 minutes a month answering any questions you guys have.
And we also do a monthly behind the scenes webinar showing you all the products we’re launching and landing pages we’re running and Facebook ads we’re doing. This month we're going to be going over our newest product launch and some things that we've been doing differently to accelerate that. We've had the number one new best seller of a product which is really cool. We’re going over all that and a whole bunch more. So, go to EcomCrew.com/premium. And besides that, until the next episode everyone, happy selling, and we'll talk to you then.