What is the Amazon Subscribe and Save Program & Is it Worth it for Sellers?
Founded in 2007, the Amazon Subscribe & Save program allows Amazon customers to sign up for regular deliveries of products they use frequently including toilet paper, dish soap, toothpaste, and baby diapers in exchange for a discount, as well as free shipping.
As an FBA seller, you can apply to include your eligible FBA offers in Amazon’s Subscribe & Save program.
In the following blog post, we explain how the program works, requirements, and feedback from our in-house team on the impact of Amazon Subscribe & Save.
What is Amazon Subscribe & Save?
According to Amazon, when a customer chooses to subscribe to a product delivery, they choose the product, how many they want delivered, and how often.
They receive a 5% discount per subscription until they have five subscriptions delivered each month, after which they will receive up to 15% discount on their entire order.
Pro-Tip: This discount does not apply to Lightning Deals.
There are two types of Subscribe & Save orders:
1. Signup orders are the customer’s initial order subscribing to a product in the Subscribe & Save program.
Pro-tip: In order for your Subscribe & Save offer to appear for a product, your offer must be the Buy Box offer.
2. Replenishment orders automatically created according to the frequency set by the customer. Subscribe & Save customers can set deliveries at monthly intervals, from one to six months.
What are the Amazon Subscribe & Save Requirements?
As an FBA seller, you can apply to include your eligible FBA offers in Amazon’s Subscribe & Save program.
If you are eligible, you can enable your participation in Amazon’s Subscribe & Save program in your account settings.
Pro-Tip: If the option to enable your participation is not available in your account settings, you are not eligible for the program. The option will be automatically enabled in your account settings after you meet the above eligibility criteria.
Eligibility criteria include, but are not limited to, your sales history and seller performance metrics.
To participate, you must have an FBA account that:
- Is in good standing
- Has a feedback rating of 4.7 or higher
- Has been active for 3 months or longer
Which products are eligible for Subscribe & Save?
Only eligible products can be included in the Subscribe & Save program. Products must be offered through FBA and you must maintain an instock percentage of at least 85%.
For eligible offers, the Subscribe & Save discount is applied to your price for the product on the day the order is placed.
The discount amount is up to 15%, depending on the total number of products the buyer has subscribed to and the product category of the offer. The discount applies to the selling price that you set for the products you offer as subscriptions and is deducted from your revenue.
Once a customer is registered, FBA will pick, pack, and ship your Subscribe & Save order(s) for you.
Subscriptions are available to customers in the following product categories:
- Beauty
- Grocery
- Health & Baby Care
- Automotive Parts & Tools
- Electronics
- Home Tools & Home Improvement
- Industrial Supplies
- Kitchen
- Lawn & Garden
- Musical Instruments
- Office Supplies
- Outdoors
- Pet Supplies
- Sports
- Toys
Pro-Tip: Customers who subscribed to products prior to August 31, 2016, receive 15% on all subscriptions until they discontinue their subscription. You are required to continue offering a 15% discount to your products to those customers.
Can customers apply coupons and promotions to Subscribe & Save products?
According to Amazon, any coupons or promotions you offer can also be applied to your Subscribe & Save products.
For example, if you run a promotion offering a 30% discount on a product that is also available through Subscribe & Save, that discount will be added to existing subscriptions.
Sellers should also note that performance review by Amazon is ongoing in order to ensure a positive customer experience.
Pro-Tip: You will be notified regarding any specific performance issues (for example, inventory levels insufficient to meet demand, noncompliance with Amazon’s general pricing rule, negative feedback, or Subscribe & Save order cancellations).
Keep in mind that poor performance metrics may result in the suspension of your Subscribe & Save offers or the termination of your eligibility to participate in the Subscribe & Save program.
Amazon Subscribe & Save: Is it worth it for Sellers?
“It really depends on the margins for the seller’s product(s),” Chris Lee, Marketplace Channel Analyst at CPC Strategy said.
“If margins are smaller (for example 9 – 20%), then Subscribe & Save might not be the best idea. What also matters is if the seller already knows if there is a high re-order rate.”
“If a seller knows a re-order is coming in the pipeline, then why lose that 15% (or whatever discount a seller may give for Subscribe & Save). But at the same time, a seller might gain customer following because of the program.”
For example, we pulled an orders report for December (12/4 -12/31) for one of our dietary supplement clients and looked at their most popular product.
Over this time period, they sold 13,728 units of their most popular supplement and 454 of those shoppers signed up for Subscribe & Save.
In other words, 3.3% of the people that purchased that product in December ended up signing up for Subscribe & Save and therefore will be repeat customers for at least 5 units.
“If margins are good and the seller does not have re-order data, then it might be worth testing out the program. A seller should always be testing to improve business strategies,” Lee said.
“I think the biggest takeaway from Subscribe & Save (or reorder data in general) is understanding whether customers will re-order another shipment – which allows us to push more heavily on advertising.”
For more information on Amazon Subscribe & Save, email [email protected]
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