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 6, 2022

Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)
Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon set to shut down Amazon Care Amazon is closing its telehealth service, Amazon Care, which launched in 2019 as a trial program for its headquartered employees. Later the service was rolled out nationwide for employees and other companies. The ecommerce giant has now made the decision to move away from the healthcare space, believing it was not the right long-term solution for its enterprise customers. [Read more on CNBC](https://www.cnbc.com/2022/08/24/amazon-is-shutting-down-amazon-care-telehealth-service.html) Peloton closes new deal to sell on Amazon Following a recent deal, Amazon customers will soon be able to buy Peloton fitness equipment on the marketplace, marking Peleton’s first move outside a direct-to-consumer model. According to Peloton’s CCO, there are already around half a million searches on Amazon for Peloton products every month, despite having no presence on the marketplace. Some key products include the original Peloton Bike, retailing for $1,445 and Peloton Guide for $295. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/24/peloton-strikes-deal-to-sell-fitness-equipment-on-amazon/) --- Other Marketplace News --- 60% of Malaysians are buying from local sellers on Shopee A recent survey of nearly 3,500 respondents found that nearly half of the shoppers prefer to purchase from local sellers due to shorter delivery times. Other shoppers decide to shop locally due to the quality of the products made in Malaysia and an interest in keeping the economy running. As a result, smaller local merchants have been able to grow their businesses, and shoppers benefit from shorter delivery times, products of high quality and supporting local businesses. [Read more on The Malaysian Reserve](https://themalaysianreserve.com/2022/08/25/around-60-malaysians-are-buying-from-local-sellers-on-shopee/) Flipkart’s social commerce platform Shopsy crosses 100 million users Flipkart launched a social commerce arm, Shopsy, in July of last year, which has now surpassed 100 million users, ahead of its target timeline being the end of 2022. This acquisition of new users has made Shopsy one of the largest platforms of its kind in the country, and is expected to onboard a further 100 million by the end of 2023. The platform is centred around boosting local entrepreneurship and powering ecommerce for consumers across tier 2+ regions where users face challenges around trust and navigation when shopping online. [Read more on Business Standard](https://www.business-standard.com/article/companies/flipkart-s-social-commerce-platform-shopsy-hits-100-million-users-1220828006851.html) Meta joins Amazon and Walmart in bid for Indian ecommerce market Amazon mentioned earlier in the year that it would be building a logistics division in-house through its purchase of a 51% stake in Ecom Express, an end-to-end logistics firm, to make ecommerce deliveries more efficient in the country. Walmart operates Flipkart in India and is set to continue its investment in the marketplace. In an effort to compete in the Indian ecommerce market, Meta has partnered with Indian ecommerce company, JioMart, to offer customers a grocery shopping platform within its WhatsApp chat feature. [Read more on Pymnts](https://www.pymnts.com/news/retail/2022/meta-joins-amazon-walmart-indian-ecommerce-market/) --- Other Ecommerce News --- Ecommerce in Spain worth €57.7 billion in 2021 Spanish ecommerce saw 11.7% growth compared to last year, largely attributed to cross-border sales. In the final quarter of 2021, ecommerce sales in Spain were at €16.9 billion euros, at least 60% of which came from cross-border sales. Transactions from foreign locations to Spain generated a turnover of €1.56 billion in Q4, a growth of 27.7% compared to Q4 a year before. [Read more on Ecommerce News](https://ecommercenews.eu/ecommerce-in-spain-was-worth-e57-7-billion-in-2021/)
Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)