Amazon Subscribe & Save Best Practices for Sellers

Clark Kleinman

September 3, 2021

Amazon Subscribe & Save allows FBA sellers the ability to offer discounted products in exchange for long term commitment from customers. This has substantially boosted sales and customer loyalty for many brands.

In the past, individual sellers who have chosen to offer discounts with subscribe and save amazon have borne the financial burden of paying for those customer discounts. However, recent changes to the program show Amazon taking more ownership, including some of the financial burden. There are definitely pros and cons for sellers, but if you understand the system, it can be very beneficial for your business.

How does Subscribe & Save work?

Since 2007, Amazon’s Subscribe & Save program has allowed customers to receive recurring and scheduled deliveries of the products they love and use most often—such as toiletries, foodstuff, and diapers—at a discounted price. It’s a great opportunity for buyers to save money on things they already plan on purchasing. When leveraged correctly, it’s also an opportunity for FBA sellers to increase customer retention and boost conversion.

Customers can choose from thousands of products and select their favorites for automatic shipping every one to six months, and are rewarded with a small discount for each order that ships. They can skip any order that isn’t needed or cancel anytime for free, so the risk is low for customers. Consumers love finding deals, so amazon subscribe and save has them built in, like when customers receive five or more subscriptions in a single month, they get a steeper discount - making the program even more appealing.

How does Subscribe & Save benefit sellers?

At first glance, providing 5-10% discounts on your products may seem like a poor financial decision. However, because you are trading discounts for more sales, your brand ends up making more money in the long run. How is this possible? Because Amazon Subscribe & Save is easy and convenient for customers, they commit to reordering products for months, and also will order multiple products at a time to receive a larger discount.

Because customers have signed up under your brand and committed to receiving a product for several months–and because customers are now automatically receiving the supplies they need without thinking twice–they no longer need to return to Amazon and peruse for other products similar to yours, limiting competition from other similar brands. You no longer have to worry about sharing the Amazon search result page with competitor brands, because once buyers are set up with Subscribe and Save all you need to do is keep up their subscription and delivery dates. This keeps sales up and customers loyal–all while shortening the reorder window. Also, an Amazon Prime account isn’t required for free shipping with Subscribe and Save, so you can reach a broader audience with the same benefits.

How to know if Subscribe & Save is best for your business

After learning about subscribe and save, you’ll need to look at your business and determine if it’s right for you. Here are some questions to ask:

  • Is your product an essential item that requires repeat purchasing? (I.e. vitamins, foodstuff, toiletries.)
  • Are your listings competitive? You should optimize your listing to receive the best from Subscribe and Save on Amazon.
  • Are you open to using discounts, or do your MAP prices allow you to discount products?
  • How is your inventory? If you are consistently stocking out of inventory, Amazon will not let you use Subscribe and Save.

Pattern can also help you decide if Subscribe and Save is best for your business, as well as how to utilize it for the highest amount of sales.

Tips for success with Subscribe & Save

If you are seriously considering Subscribe and Save amazon, you will need the correct tools. Here is an in depth look at the details of the Amazon Subscribe and Save system to set you up for success. There are three main topics that sellers will want to pay attention to:

  • Tiered discount options
  • Who funds the discounts
  • How products are enrolled

1. Tiered discount options

Originally, the amount of discount was determined by which category items were in. Sellers can now opt in at either a 0%, 5%, or 10% base discount to customers.

Amazon claims that funding at 10% can drive up to a 1.8X increase in conversion over no discount at all. Being able to choose a 5% or 10% discount means that sellers can now make more strategic decisions based on various factors. Having the option to push up to a 10% discount gives aggressive competitors an extra weapon in their arsenal.

It’s important to note that once a customer has ordered at a certain discount rate, that rate will be locked in until the customer either skips or cancels their subscription. Customers are also notified of when prices are increased and can choose to skip or cancel their orders.

2. Who funds Subscribe & Save discounts

In the past, sellers saw no personal benefit from paying the higher discount rate for 5+ monthly subscriptions. Those items didn’t have to be from the same seller, so sellers were essentially paying for the benefit of a customer being very Amazon-centric. Acknowledging this, Amazon has taken responsibility for the additional discount offered for 5+ monthly subscriptions, but made it a standard 5% above the seller discount.

That means customers may receive 5/10 or 10/15 discount based on their number of subscriptions, but sellers are only responsible for the 5% or 10% that they’ve committed to. (There is a 0% option, but we’ll discuss that later)

During the transition from the old model to the new model, it is a bit unclear on how long existing subscriptions will continue with 5/15 before getting pushed over to the new pricing model. All pre-existing Subscribe and Save ASINs are, however, automatically enrolled at the 5% discount. Sellers would need to manually change those legacy items to 10% if they wanted to offer a steeper discount moving forward.

3. How products are enrolled

One of the biggest changes to Subscribe and Save on Amazon—and the one that could possibly cause contention for some brands—is in how items are opted into the Subscribe & Save program. Instead of relying on sellers to choose which products offer subscriptions, Amazon now determines which items are most relevant to regular replenishment and automatically enables Subscribe and Save at a base 0% discount.

That means that brands that follow tight pricing practices will now have their products below their Minimum Advertised Price, but technically Amazon skirts this complaint by not offering the discounted price on the product detail page. The discount is only realized behind-the-scenes if customers receive five or more subscriptions in a single month. They would then receive a 5% Amazon-funded discount.

In addition, the ability for sellers to bulk upload products for enrollment in Subscribe & Save has been removed. To begin offering a 5% or 10% discount, sellers need to contact the Amazon Subscribe and Save team to check eligibility and get those running (or to opt out of the program altogether). It’s important to note that in order to apply you will need to be reaching a minimum number of sales per product and have enough inventory in-stock. With so many other great things happening, this seems like a step backwards for the Subscribe and Save program.

Overall, these changes reflect Amazon’s obsession with providing a good customer experience. More products will be available with Amazon’s auto-enrollment feature for replenishable products, which means bigger savings for customers. Sellers will benefit as well, because they can strategically choose their discount tier—and only pay for what they’ve committed.

How Pattern can help

Pattern will examine your brand and products, then help you understand if you should launch on Subscribe and Save. If the answer is yes, we’re ready to jump in and optimize your listings for best effectiveness; streamline your logistics for efficient inventory; and provide reporting and insights on how your products are performing and where the next opportunities lie.

Not sure what discount parameters to start with? Curious what percentage of brand orders come from Subscribe and Save? We’ve got expertise in that too. On a brand level we can help you identify your best sellers and how much of your success comes from Subscribe and Save. On a product level, we can check data to determine changes in subscribers, number of subscribers per product, and how those change over time. And that’s not even getting in to our advertising tactics to drive leads to your offering.

Ready to upgrade your Subscribe and Save offering? Get in touch today to learn what Pattern can do for your ecommerce business.

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Slowing Inflation is Music to Consumers’ Ears
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Slowing Inflation is Music to Consumers’ Ears

**Instrument Pricing Changes Tune Amid Record Inflation** Compared to 2022, consumers should expect to pay more for musical instruments, but the rate of inflation shows signs of slowing. **The backstory:** America’s most popular musical instruments saw a notable price increase in 2022 compared to 2021, but the rate of inflation eased in Q4 ’22. **Why it matters:** Slowing inflation within this product category could indicate economic pressures like increased demand, rising labor costs, and supply chain disruptions are easing across the consumer landscape. **What we’re seeing:** The average cost of musical instruments increased 7.5% from 2021 – 2022; however, when analyzing individual increases year over year, some instruments saw price increases as high as 21%. <iframe title="YOY Price Change for Instruments — 2022 vs. 2021" aria-label="Bar Chart" id="datawrapper-chart-02Lwk" src="https://datawrapper.dwcdn.net/02Lwk/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="379" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * Trombones experienced a 21.73% increase compared to 2021 * Trumpets +20.08% * Flutes +18.6% * Recorders +16.13% * Saxophones +13.63% * Clarinets +10.55% * Drums +5.41% * Ukuleles +5.17% **However:** Inflation among these same instruments was significantly less in Q4 ’22 compared to Q4 ’21. In some cases, prices decreased from Q4 ’21 – Q4 ‘22: <iframe title="Price Change for Instruments — Q4 2022 vs. Q4 2021" aria-label="Bar Chart" id="datawrapper-chart-6X6GZ" src="https://datawrapper.dwcdn.net/6X6GZ/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="379" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * Trombones +11.23% * Flutes +10.41% * Saxophones +5.94% * Clarinets +5.59% * Trumpets +3.10% * Recorders +2.85% * Drums -2.59% * Ukuleles -8.46% **Moreover:** Certain instruments saw inflation reverse in 2022. On average, prices for melodicas, guitars, and violas saw their prices decrease by 4.41%, 3.19%, and 0.97%, respectively. <iframe title="YOY Price Change for Instruments — 2022 vs. 2021" aria-label="Bar Chart" id="datawrapper-chart-0Tefk" src="https://datawrapper.dwcdn.net/0Tefk/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="259" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **Diving Deeper:** Inflation was more significant when comparing Q4 ’21 to Q4 ’20 than when comparing Q4 ’22 to Q4 ’21, indicating a slowing down of price increases for consumers. <iframe title="YOY Q4 Price Change for Instruments — 2020 – 2022" aria-label="Stacked Bars" id="datawrapper-chart-p6iqt" src="https://datawrapper.dwcdn.net/p6iqt/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="206" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * In Q4 ’21, average prices for all instruments were up 8.89% compared to Q4 ’20. * When comparing Q4 ’22 to Q4 ’21, the average price for all instruments only increased by 2.65%. **The takeaway:** While consumers should expect to pay higher prices for instruments this year, overall inflation impact within this product category appears to be slowing down. With National Ukulele Day coming up on February 2, now is a great time for ecommerce brands to take advantage of slowing economic worries and reach new consumers. * Want Pattern’s data science team to power your brand with consumer insights like these? Contact us to [request more information](https://pattern.com/contact-us/) today.

Slowing Inflation? What Musical Instrument Pricing Tells Us
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Slowing Inflation? What Musical Instrument Pricing Tells Us

It’s safe to say consumers and brands alike are eager for a change to the pattern of rising inflation, steadily increasing in many ecommerce categories . Pattern’s internal team’s data scientists analysis of instrument pricing shows a glimmer of hope that inflation may be slowing, which would be great news for brands selling online.

At Pattern, we’re interested in and monitoring trends and news related to pricing since price is a key factor in a brand’s profitability (as explained in the Ecommerce Equation). When brands are able to optimize their price, conversions, and traffic, they can optimize their profitability. And profitability leads to better allocation of resources, better brand control, and gives leaders the ability to expand their presence to new markets worldwide.

YoY Instrument Pricing Increased at a Slower Pace

When analyzing the pricing changes of instruments from 2021 to 2022, our teams found that prices increased, but at a slower rate than from 2020 to 2021.

As shown below, the year over year Q4 changes show quite a lower rate of increase.

Inflation Improvements Raise Profitability

Because inflation impacts online shopping behaviors, lower inflation can lead to better overall profitability for brands. This idea, of course, is nuanced, but Pattern’s Ecommerce Equation can help illustrate the general principle.

When inflation rises, consumers change their spending habits. Shoppers spend more time researching products, forego premium, higher-priced brands, and buy more in bulk. Brands tend to see a loss of loyalty as they’re forced to raise prices.

Price is a key variable in the Ecommerce Equation: price x conversion x traffic = profitability. As inflation lowers, brands can expect better performance in all of these areas—more traffic as spending habits return to normal, higher conversion from returning customers, and price that better fits consumer demand. As inflation lowers and these variables stabilize, brands will see profitability increase.

Raise Your Profitability with Pattern

As an ecommerce accelerator, Pattern is obsessed with gathering data that helps our brand partners succeed. We’ve created best-in-class technology, models, and analytics to understand changes on the horizon and inform our decisions. With an incredible team of data obsessed Pattern employees, we see what makes the difference in truly great ecommerce performance and apply those learnings for brand partners. 

Ready to improve your profitability? Contact us here.

Inflation hits LEGO, but lighter than you’d suspect
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Inflation hits LEGO, but lighter than you’d suspect

**Some sets get more expensive, while others become cheaper** In June 2022, LEGO announced it would be increasing the prices of their sets. Ever since, consumers anticipated their favorite plastic construction toy prices to increase [by as much as 25%](https://9to5toys.com/2022/06/02/lego-officially-confirms-price-increases-coming-to-most-sets-later-this-fall/). **Why it matters:** Consumers are feeling the sting of inflation in all areas of their lives, from groceries and gas to entertainment. With LEGO Day right around the corner (January 28th), fans may wonder whether it’s a good time to purchase a set. **What we’re seeing:** While inflation continues to ravage the economy, consumers are seeing a small reprieve when it comes to the pricing of LEGO sets. Despite the anticipated 25% price increase, average prices among the top LEGO sets only increased by 4.7% year over year when comparing Q4 2022 to Q4 2021. <iframe title="YOY Price Change for All LEGO Sets – 2022 vs. 2021" aria-label="Interactive line chart" id="datawrapper-chart-3gn9L" src="https://datawrapper.dwcdn.net/3gn9L/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="393" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * During this same period, annual prices for some of the most popular LEGO sets were up as much as 23%. <iframe title="U.S. Price Change for LEGO Sets – Q4 22 vs. Q4 21" aria-label="Split Bars" id="datawrapper-chart-vh7B2" src="https://datawrapper.dwcdn.net/vh7B2/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="708" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **Yes, but:** Prices of other popular sets were down by as much as -12% during this same period. Depending on the kit, consumers might actually find some popular LEGO sets have gotten less expensive since 2021: * LEGO Star Wars Imperial Probe Droid was down -6% in Q4 2022 vs. Q4 2021 * LEGO Creator Tuk Tuk was down -7% * LEGO Star Wars Ultimate Millennium Falcon was down -10% * LEGO Ideas Tree House Business Kit was down -12% **However:** Even for the sets that experienced a price decrease, the decrease was less significant in Q4 2022 as set prices increased across the board following the June 2022 announcement. <iframe title="YOY Price Change for Individual LEGO Sets – 2022 vs. 2021" aria-label="Interactive line chart" id="datawrapper-chart-KjSXz" src="https://datawrapper.dwcdn.net/KjSXz/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **The takeaway:** While prices didn’t increase as much as consumers anticipated, inflation still had an effect on the cost of LEGO sets. As ecommerce brands prepare for increased demand ahead of LEGO Day, they could increase customer interest in all sets by promoting the sets that have seen a price decrease. * Pattern’s data science team analyzes consumer demand on Amazon to understand how economic forces impact pricing and shopping behavior. If you’re interested in using insights like these to propel your ecommerce strategy forward, [contact our team today. ](https://pattern.com/contact-us/)