Based on demand in today’s market, people are ready to spend. Any ecommerce player can take advantage of this while generating revenue and profits. But reacting to Prime Day might not be the best move.

John Gilbo

John Gilbo, enterprise account executive, Pricefx

Amazon Prime Day is a “holiday” created by the behemoth in 2007 and now widely celebrated by its members yet, particularly this year. Some may ask, why would Amazon goose demand when consumer spending is up?

My answer to this question is that Amazon doesn’t have much to lose.

I’ve had a career closely aligned with retail and ecommerce, leading pricing strategy at Kirkland’s, Academy Sports + Outdoors, and Safeway. After witnessing the world of Amazon and everyone participating in it—whether they like it or not—small and large businesses have much more to lose in this Prime Day game, especially if they take a copycat approach.

The giant takes a 40% share of the ecommerce pie. It’s no use trying to battle the 300-pound gorilla on its special day when all it wants is its giant slice of cake. Amazon made a total of $10 billion in sales on Prime Day last year.


Based on demand in today’s market, people are ready to spend. Take this as a good sign. Any ecommerce player can take advantage of this while generating revenue and profits. Below are my takeaways.

Demand is up now, but Amazon planned Prime Day months ago

Yes, the world’s supply and demand are on another seesaw, a year after COVID-19 began. Suppose you’re trying to remodel your home. If so, good luck buying lumber at an affordable price. Lumber is one of many industries dealing with demand issues. Some are going with a reactionary approach and raising prices to make up for the lost cost of the last several months.

Specifically, for Prime Day, sellers that participate likely have 1) the inventory and 2) worked on the costs and discounts ahead of time, ensuring the offers meet their KPI objectives, like margin.


No matter the market flux, Amazon and approved Prime Day participants have worked up to this moment with pre-planned analytics, locked in the supply chain for these products, while the whole team is moving to make this successful.

Don’t poke the bear

If you’re not a vendor during Prime Day, don’t drop your prices. Chances are you haven’t received the lower costs to offset the price drops. There is a lot of revenue opportunity, but that doesn’t mean you need to compete with the big guy. If you carry the same blender as Amazon, you will likely lose money if your drop your price to match a Prime Day deal. It will be hard to pull people off Amazon’s site during these two days, so lowering your price may be an exercise that doesn’t improve demand.

Folks like Walmart, Target, and others attempt to chew away with their own deal days rather than wait to compete during Black Friday/Cyber Monday. Will it work? Historically, according to one analysis, Walmart’s version of its deal day wasn’t impressive; and Amazon tends to match Target’s prices within a couple of hours.


Watch and learn, then do your own thing

Amazon did not create Prime Days in reaction to competitors. It is an Amazon event with teams working to make the events happen. What makes you and your business unique? How do you build upon what you have and maximize your strengths into something better? What strategic partners do you have that can help you make this successful?

Iterate, fail fast, understand what worked and what didn’t. Take this time to use analytics, pre-plan around an event and run a “what if” forecasting plan. Dig deeper in your post-event analysis, and create your own event intelligently based on your customers.

The 4th of July is a hot time for the home goods market. And back-to-school sales run throughout the summer, making the season is a great time for a promotion. Apple, for example, is throwing in a set of AirPods when you buy a MacBook. Or why limit savings to a few items that you select? Instead, check out REI for inspiration. The retailer is giving customers the ability to choose 20% off an item.

If you want to do an event, launch it when it works best for you and your customers; it most likely will be a day other than Prime Day.


Pricefx provides price optimization and management software.