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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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 20, 2022

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)
Sept 13, 2022

Global Ecommerce Weekly News: 13th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon scales back on US warehouse facilities Amazon is shutting down two facilities with 300 employees, discarding plans for 42 facilities, and delaying plans to open a further 21 buildings across the US. The ecommerce giant is scaling back on hiring as well as the expansion of its vast delivery network, as it was left with an excess of space following its rapid expansion during the pandemic. [Read more on Business Insider](https://www.businessinsider.com/amazon-closes-2-facilities-scraps-plans-42-new-buildings-report-2022-9?r=US&IR=T) --- Other Marketplace News --- JD.com is ‘betting’ on ecommerce grocery market Amidst a slowing economy and a decline in ecommerce, Chinese ecommerce giant JD.com has increased its urgency to seek new growth engines. The company is looking to boost its online grocery business through offline partnerships and expansion into lower-tier cities, where it may be able to unleash more consumption power. [Read more on The Star](https://www.thestar.com.my/tech/tech-news/2022/09/08/chinese-ecommerce-giant-jdcom-bets-big-on-online-grocery-lower-tier-markets-amid-slowing-economy) Shopee shuts operations in Argentina, Chile, Colombia, and Mexico Sea’s ecommerce arm, Shopee, has shut local operations in some LATAM countries but will continue to maintain cross-border operations in a few markets. Latin America is Sea’s most important region following South-east Asia, accounting for close to 19% of its revenue in 2021. The move away from these countries is largely due to increased levels of macro uncertainty and rising interest and inflation rates, and rather putting a focus on its core operations. [Read more on Straits Times](https://www.straitstimes.com/business/companies-markets/seas-shopee-shuts-operations-in-argentina-chile-colombia-mexico-sources) --- Other Ecommerce News --- Instagram scales back in-stream shopping elements Instagram is re-examining its approach as it hasn’t been able to make ‘fetch’ happen. ‘Fetch’ in this context being the online shopping trends which have become all-consuming in China, and what Western social platforms have been hoping to add into their apps to make them more addictive and revenue-generating. Consumers have not been swayed by the latest shopping tools on TikTok and Instagram, leading to Instagram scaling back its in-stream shopping program. [Read more on SocialMediaToday](https://www.socialmediatoday.com/news/instagram-scales-back-in-stream-shopping-elements-as-it-re-examines-its-app/631276/) FedEx Express supporting the growth of cross border ecommerce FedEx express has expanded its international commerce shipping service to four more markets across the Asia Pacific, Middle East and Africa (AMEA) region in an effort to support the strong development of ecommerce in this region. Three of the fastest growing markets, the Philippines, Indonesia and Vietnam are leading Southeast Asia’s ecommerce sales, which is set to reach $100 billion by 2023. [Read more on Post & Parcel](https://postandparcel.info/149889/news/e-commerce/fedex-express-supports-the-growth-of-cross-border-e-commerce-within-the-amea-region/) India ramps up hiring as companies prepare for shoppers Ecommerce companies are getting ready for the festive season by rapidly expanding their temporary workforce. As ecommerce in India grows, the country is predicted to have 372 million online shoppers by the end of 2022. The festive season this year, running from October to December, is expected to see a two-fold increase in logistics and delivery alone. During this period, companies are predicted to add 20% more to their existing workforce base, with a 8-10% higher pay scale compared to last year. [Read more on Business Insider India](https://www.businessinsider.in/business/ecommerce/news/the-great-indian-festival-of-hiring-e-commerce-companies-gear-up-for-indias-shoppers/articleshow/94000346.cms)