What You Need To Know About Amazon’s Subscribe & Save Program
What is the Amazon Subscribe & Save program?
Amazon’s subscription program, Subscribe & Save, was first introduced in 2007. The program gives shoppers the opportunity to receive routine and scheduled deliveries of household necessities at a discounted rate. It’s an excellent way for shoppers to save money on their most-used items at home and gives FBA sellers a chance to improve their customer retention. Customers can select products to be delivered in regular intervals, monthly for example, and are provided a discount with every order that successfully gets delivered. They can cancel any order they don’t need without penalty, and those that place orders for five or more products in a month are given an even steeper discount.
Eligibility Requirements
To be eligible for participation, a brand must have an active selling account in good standing and be the owner of the brand. This means that the products you want to enroll in the program are part of a brand enrolled in the Brand Registry. Other criteria for product eligibility include:
- Trailing 28 days in-stock rate is greater than 90%
- Not in a restricted product category
- Average selling price is less than $200
- Offer is buyable
For an offer to be eligible, it must meet the following criteria, for a period of three consecutive months:
- Free domestic shipping
- Valid tracking rate greater than 95%
- Order defect rate less than 1%
- Pre-fulfillment cancel rate less than 2.5%
- Delivery estimate accuracy greater than 93.5%
- Late shipment rate less than 4%
- Average delivery promise for domestic shipments fewer than 5 days
Keep in mind that eligible products are automatically enrolled in Subscribe & Save at the default enrollment discount that is selected (this is set to 0% by default unless previously changed under Manage Products in your Seller Central account).
What Products Can Be Enrolled in Amazon’s Subscribe & Save?
In addition to the product eligibility criteria above, only products in select categories can be sold using Subscribe & Save:
- Beauty
- Grocery
- Health & Baby Care
- Automotive Parts & Tools
- Electronics
- Tools & Home Improvement
- Industrial Supplies
- Kitchen
- Lawn & Garden
- Musical Instruments
- Office Supplies
- Outdoors
- Pet Supplies
- Sports
- Toys
Tiered Discounts
As previously mentioned, sellers can now offer a 5% or 10% discount to repeat customers. Amazon asserts those who offer the 10% discount can increase their conversion rates by 1.8X as compared to not offering a discount at all. Sellers who can provide those discounts can alter their selling strategy based on varying industry factors, and those that offer the 10% discount gives sellers a substantial competitive edge over other competitors who offer none.
Who Funds the Discounts
Previously, sellers saw no benefit for paying for the higher discount rates for their customers receiving 5 or more monthly subscriptions. Those subscriptions didn’t have to be from the same seller, so sellers were essentially paying for consumers to be loyal to Amazon, and not the brand. Amazon has now taken responsibility for the additional discount, by making it a standard 5% above the seller discount. All subscriptions created after November 5, 2019 now follow the discount and funding information below:
- Seller Funded at 0%: four subscribed products that are scheduled for delivery on the same day earns the customer no discount. Five or more on the same day earns a 5% discount, which is funded by Amazon.
- Seller funded at 5%: four subscribed products that are scheduled for delivery on the same day earns the customer a 5% discount funded by the seller. Five or more earns an additional 5% discount funded by Amazon, boosting the total discount to 10%.
- Seller funded at 10%: four subscribed products that are scheduled for delivery on the same day earns the customer a 10% discount funded by the seller. Five or more earns an additional 5% discount funded by Amazon, boosting the total discount to 15%.
Subscribe & Save FAQs
How are Subscribe & Save orders fulfilled?
Products must be sold through Amazon FBA to be eligible for Subscribe & Save. Amazon has noted that they can make exceptions to this if you fulfill the product yourself, but you must contact their support team for this request.
Are there any fees associated with Subscribe & Save?
There are no direct fees for enrolling products in Subscribe & Save, but brands must account for the discounts and any impact they may have on their profit margins. Standard FBA fees and other standard Amazon selling fees will continue to apply.
What are the benefits of offering my products through Subscribe & Save?
Some of the most common benefits of the program include increased sales volume, improved customer retention, and more predictable revenue. Other benefits include enhanced product visibility and building a loyal customer base.
How does the program impact my inventory management?
Selling on Amazon has always required careful inventory planning and management to avoid stock outs and excess FBA inventory. With Subscribe & Save, sellers can anticipate repeat sales which can help with forecasting inventory more accurately.
Can I control the discounts offered in Subscribe & Save?
You can choose from three seller-funded options: 0%, 5%, or 10%. Subscribers who receive five or more subscriptions on the same delivery reach tiered status which means Amazon will fund an additional 5% discount.
How does product pricing work?
Pricing for Subscribe & Save must be competitive and worthwhile for customers as there is an expectation of savings in exchange for their loyalty and repeat purchases. It’s important to consider profit margins when deciding on the discounted pricing to maintain profitability.
How often can customers receive products through Subscribe & Save?
Customers can choose the frequency of their deliveries, allowing them to receive the products at intervals that best fit their needs. Some common delivery intervals include: 2 weeks, 1 month, 2 months, 3 months, with every 3 months being a popular choice amongst consumers.
If you have any more questions on the Subscribe & Save program or selling on Amazon, we’re here to help. Contact us today.
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