Maximizing your FBA sales

Sometimes, a product will sell reasonably well, but it reaches a certain point where it just stops growing. You need to be able to give it a push, so that it can start growing again. There are a lot of ways to do that; some are easy and cheap, others take a bit of time and effort, and some also involve a bit of investment.

Sometimes you might just need to brush up your keywords or do a little more advertising. But there are a lot more ways to promote your product.

Get more reviews! Include a “please review me” tag with the product, send a follow-up email to purchasers, or use the Amazon Vine program if you have a really low number of reviews.

Get reviews on other platforms too, such as Facebook, Twitter or even eBay. On Facebook you can ask for specific feedback on the product – for instance you can ask customers what color they would most like to buy, or what was the thing they learned that really helped them get the most out of the product. You can use the results to come up with new products, to add to your product listing, or even to create a tip sheet or troubleshooting sheet for your product (“How not to burn your cupcakes”).

Run a daily deal. Sometimes all a product needs is a quick boost to sales to improve its Amazon sales ranking and start topping searches. Amazon offers a number of formats including coupon codes, Lightning Deals, and so on – use them to create a bit of excitement.

Be active in the Q&As on your product pages. Often, these are where customers will find the one piece of information that makes the purchase decision easy, for instance whether the throw will fit their sofa, whether a dog collar is big enough for their Great Dane, what rating sleeping bag to order for winter camping.

If you can highlight your product USPs at the same time as answering the question, you’ve killed two birds with one stone. “Our flask has an attachment for a carabiner or belt, so you can take it hiking and have it easily available.”

Use A/B testing (split testing) to run two offers simultaneously, or assess whether changes you’ve made to the product page are working. This gives you real, real-time data on just how effective your changes, promotions, or ads have been, so you can refine your offering based on fact not gut feeling.

Check your keywords and check what keywords your competitors are using, too. Look at your reviews and Q&A for idea on what might be useful to include as long tail keywords, for instance “super strong dog collar”, “dog collar for big breeds”, and so on.

Rewrite your product description. A picture is worth a thousand words, but you should have about a thousand words anyway, well divided up into bullet points. Make sure your major keywords are all included in the product description.

Start a Youtube channel around your product and/or its uses. Putting up one video a month can really boost sales, as long as you remember to post the link to your product. Recipe videos for cooking equipment, and makeover videos for decorative products and paints, are always popular.

Learn how to cross-sell and upsell using your own site or your Amazon Storefront.

Try partnering with other brands. For instance if you have a set of craft glues, why not cooperate with vendors of other craft or scrapbooking materials?

Create a unique package with its own ASIN. Tack on extras, for instance selling dog collar, leash and harness together, or a card game with a choice of expansion sets. This will really help you out-compete your rivals, who are only offering the separate products and not the package.

Don’t underestimate how much Amazon’s auto-generated ads can do for you. Sometimes they outperform manual campaigns by a wide margin, because if there’s one thing Amazon really knows, it’s how its own algorithms work!

And finally, of course, consider using Vipon for deep discount offers to get your sales moving.



How to let customers know about your discounts

One of the things behavioral psychologists know is that how things are presented to people makes a huge difference to the way they perceive them. If you’re ever seen the optical illusion in which two lines of the same length appear to be of different lengths, you’ll know that presentation accounts for nine-tenths of our perception. (This illusion actually has a name – the Muller-Lyer illusion.)

So how you present your discount affects how successful it will be. For instance, if you just cut your price but you don’t also display the pre-discount price, customers may see the price is less than they expected, but they won’t see that it’s a promotional offer. This means their feeling of getting ‘something extra’ will not be so pronounced. They will also expect that price to be the ‘normal’ price, so when your discount is no longer available, they will be discouraged by seeing what they think is a price increase.

That’s why at Vipon we always show the original price crossed out before we show the discounted price. Even if the customer doesn’t do the math, when they see $22.99 crossed out and $7.13 as the new price, they know they’re getting a bargain!

There is a interesting example in the auto sector. Marketing consultants Simon Kucher & Partners carried out a survey in which the same car was offered at the same price, but telling some consumers it was the standard price, and others that it was list price less a 12% percent discount. When the consumers were asked “Would you consider buying this car?” only 21% of the ‘list price’ group said ‘yes’. But 58 percent of those who thought the car was discounted would consider a purchase.

So a discount does actually appear to have a value. It’s as if you are giving a free gift along with the purchase.

There’s also a sense in which the list price is what consumers look at to assess the quality of the product. You read about “a $300,000 house” or “a $62,000 car” or The Six Million Dollar Man and you know how you’re meant to value the product. So in that experiment, customers who saw the discount felt they were buying nearly $30,000 worth of car for $25,000, rather than buying a car that was only worth $25,000.

But you should also look at what kind of discounts your competitors are offering. Each type of product tends to have a median level of discount, or a ‘sweet spot’. For instance, if you offer a discount below $500 on a new car, it’s going to have very little effect. But if you offer $1,000 to $2,000, customers will pay attention. If you offer more, you probably won’t get much extra impact on sales.

If you’re keeping tabs on your competitors, you may see some of them reducing their prices. Rather than match their price cuts, you might consider offering a discount that will bring your product’s effective price just below theirs, while keeping your list price at the same level. That sends a message that your product is higher quality but just happens, right now, to be available for less than it’s worth.

The other big feature of how you communicate your discounts is how you present them as being exclusive, or time-limited. Whether you have discounts only for members of your mailing list, or only on 500 units, or only for a week, the more you limit your discount availability, the more effective it will be as a motivator for purchasers.



How to create excitement about your product

Creating excitement about your product is something that goes above and beyond normal advertising. It’s like the difference between someone telling you the funfair is coming to town, and actually walking into the funhouse.

One way to create excitement is to have a competition. You can’t do that on Amazon, but if you have an email list or active social media it’s quite easy to do. Suppose you sell cat food and toys. Any of these ideas would work:

•      a TikTok challenge for cutest cat costume, perhaps coming up to Halloween;

•      a quiz about famous people’s cats, which could use a multiple choice form on your website and automatically give a 20% coupon for full marks;

•      “name this cat” with a local cat refuge;

•      give anyone starting to follow you on Instagram the chance to win a month’s cat food.

Make sure the prizes are appropriate to the level of competition. If people make a big effort, make sure the prize feels worthwhile. And look for ways to continue the excitement; take photos of competition winners, run a ‘best of the best’ vote or ‘people’s choice’ vote, or  make a gallery of entries.

Another way to create excitement is to link to events. But the link has to be real. If you sell cycling accessories, a link to the Tour de France can work well. For instance a bingo card that followers can mark according to events on the Tour, or a fantasy team game, would be great ways to capitalize on the race. (Remember to check local lottery rules and if you’re offering Tour-related stuff, make sure you keep the right side of the copyright rules.) Or you could issue a Tour de France challenge for leisure cyclists; can they cycle a ‘King of the Mountains’ route locally? Step up their distance by 1 km every day?

But if you sell beauty products, that’s going to be a very tenuous link, and probably won’t get many of your customers excited.

While real life examples don’t necessarily create the same kind of excitement, they’ll still help people make an emotional connection to your product. So if you have a way to use your competitions and events to create content that you can use later, it’s a great idea. Interviews, photos, and videos can all be planned at the same time that you plan the event. Then you’ll be able to extend the excitement a bit longer.

Of course there’s another way to excite customers, and that’s to create deadlines. Some brands do this by offering limited edition goods. For instance, Montblanc has ‘Patrons of Art’ pens which can cost as much as $3,000. Converse has limited edition trainers, sometimes cooperating with fashion brands like Comme Des Garçons. If you don’t press the Buy button right away, you might miss your chance.

Of course, you can also offer a discount with a deadline, or with a limited number of goods available. “We’re offering half-price Hello Kitty schoolbags – but only 500 of them!” or “Special Thanksgiving discount up to midnight on Thursday” are great messages to get customers’ attention. A Lightning Deal on Amazon could get them buying, though you’ll need to be lucky enough for your product to be features at a time when your customers are online, and not at three o’clock in the morning.

Or you could use Vipon to offer a discount. Vipon members know exactly how important it is to act quickly before those tempting offers disappear!



HOW TO RUN GREAT PROMOTIONS

When you’re thinking of discounting a product there are a number of questions you need to ask yourself. If you’re not certain of what you’re doing, you’re making less profit for no reason.

First of all you need to ask what is the purpose of the discount. It should have a definite reason, such as:

•      liquidating old inventory,

•      getting a newly launched product off to a good start,

•      increasing market share,

•      putting the pressure on weak rivals or discouraging new entrants.

You also need to work out the numbers. A discount will not necessarily make more profit. If you have a $20 product and your gross profit is $8, you might want to lower the price by 10%. With $12 in production cost, if you lowered the price to $18, your gross profit is cut from $8 to $6, or 25%. So you’ll need to sell 25% more volume to break even.

That’s a lot more volume. If you are a new entrant to a product area, you may find that the discount is enough for customers to decide it’s worth trying out your product even though they usually buy a different brand. That could make it worth while discounting.

In the same way, if you have seen a number of new entrants coming into your sector, a short sharp discounting campaign might make them think better of launching new products. However, if they reduce their prices to compete, you’ll have lower profitability in future. That’s the risk you take.

How are you going to present and publicize your discount? Just reducing the price isn’t enough. You need to attract people’s attention, and you need be able to get people excited about it.

This is where it can help to think about who in particular you’re targeting as new customers. Here are a few ideas:

•      customers who usually use another product, but might use the discount to try yours;

•      customers who usually buy cheaper products, but might buy yours if the price is reduced;

•      new customers (banks and credit cards often offer better terms to new customers);

•      customers who bulk buy.

You might also want to think about who you don’t want to see the discount. For instance, if you’re offering a special deal to new customers, you might want to try to advertise it in such a way that as few existing customers as possible see it. Or if you’re offering a deal only to customers in certain states, again, you want to try to stop customers who don’t qualify from seeing it.

Couponing and the use of discount sites is a great way to help keep your discounts focused. Existing customers probably won’t see your discounted stock unless they’re members of the site or actively clip coupons.

Finally you need to be able to monitor whether the discount worked. Did it bring in the expected increase in sales? Did it shift your inventory? Even when you’ve ended the discount campaign, you should be checking whether sales fall back to the pre-discount level, or whether you’ve managed to retain the new customers you brought on board. If you’ve expanded your customer base long term, then you can see the lower profit on discounted stock as an investment – but only if it actually works!



Discounting: comparing your costs

As a seller, you need to consider discounting against other ways of spending your Amazon marketing budget, such as advertising, or paid social media content. You also need to consider the impact of Amazon fees, for instance, if you’re trying to shift slow-moving stock.

The difficulty is that you think of a discount as money off the sales price. To do your calculations you really ought to think of it as a marketing cost.

For instance, a new product could be introduced with just advertising, or a mixture of advertising with a couple of discount deals, perhaps a Lightning Deal on Amazon. To look at the figures, you’ll want to do this sort of calculation:

•      cost of advertising = cost A

•      cost of advertising plus the discount = cost B.

If you show discount as a cost, rather than changing the sales price, it’s much easier to model different scenarios on your spreadsheet. You can play with different proportions of costs, too; run your figures to see what happens if you spend half your money on advertising, against three-quarters. You may find that there is a certain number of sales at which you want to cap the discount.

Of course, the difficulty is that you won’t know in advance how well the advertising and discounting will work. But you can still choose a mix that suits you.

The other advantage of doing your sums like this is that if you treat the discount as a  cost, in a couple of months’ time you will be able to look back at the return on your investment in terms of the sales that were stimulated (assuming you still make a profit). So you know how much money you made on that level of discount. That can help you work out how useful your discounting and advertising has been, and may help you budget better next time round.

You might also want to discount slow moving stock. In this case, you need to consider the discount against Amazon’s storage and discontinuation fees. Check the rate card at Seller Central (https://sellercentral.amazon.com/gp/help/external/G3EDYEF6KUCFQTNM): they depend on the size and type of product. You might also be charged overage fees (https://sellercentral.amazon.com/gp/help/external/V8JEETWV9Q33CMX) if you go over your allotted storage space, and an aged inventory surcharge (https://sellercentral.amazon.com/gp/help/external/GJQNPA23YWVA4SBD) for units stored over 271 days. (This got more expensive in May – Amazon only used to charge for units that had been in store for a full year.)

We’ve put the links up for you as Amazon has been changing fees fairly regularly for a while. If we put them on this blog they’ll probably be out of date by the time you look at them.

Add together all the fees that apply to your slow moving stock over the period that you think you’ll have to keep it in store. To this you may want to add Amazon’s removal order fees, which are charged if you decide to take product out of its warehouses (https://sellercentral.amazon.com/gp/help/external/help.html?itemID=9W7FVTLY343ZBKN&language=en_US&ref=efph_9W7FVTLY343ZBKN_cont_6F7CN3EQS7MEGCN). This is the total amount of discount that you can offer on the stock in hand and still do better than leaving it in the warehouse. (Obviously, don’t forget the Amazon selling fees you’ll have to pay on selling the discounted stock. That would give you a falsely optimistic answer.)

Note that this doesn’t necessarily mean you’ll make a profit, but it will minimize your cost of closing down an unproductive line. It might also be more cost effective to get your inventory back to regular levels with a discount than to pay overage fees or aged inventory surcharges.

Again, the key to making the right decisions is to look at discounts as a cost of doing business, just like your product cost, marketing costs, or other Amazon fees.



Why discounts make people spend more

Auctions are great places to get a bargain, you would think. For instance, at one auction a foreclosed house that had started at $25,000 came down to the crazy price of $2,000 before a bidder put her hand up.

She thought she’d got a bargain. Unfortunately so did the guy in row three. Up went his hand, and up went the price to $3,000. Her hand went up; $4,000. His hand went up; $5,000. Eventually, the house sold for nearly $40,000.

If either of those bidders had put their hand up at $25,000, they’d probably have got the house at that price.

What made them behave like that? Two things. First of all, the love of a bargain; and then secondly, fear of missing out (FOMO). At some point, they each decided that not letting the other person get a bargain was more important than actually getting a bargain themselves.

If you’re selling on Amazon you won’t be selling at auction, but recognizing these emotional responses from customers puts you in a good place to maximize the effectiveness of your discounts.

Remember that in a way, a customer has an emotional connection to the price they pay, not just a rational one. Imagine you just managed to score a fantastic car for ten percent below the usual price – then your friend says “Hey, I managed to get the same price and they added leather seats, too!” Suddenly you don’t feel so happy!

This is what’s called the ego-expressive aspect of price. You feel the price you pay is an expression of who you are; a smart shopper, a good negotiator, a bargain hunter.

So how do you make use of this? One thing you definitely must not do is to destroy smart-shopper feeling by increasing your discount once customers have already bought your product, unless there’s a good reason such as a closing-out sale. That makes them feel mad. “Hey! I thought I’d got a good deal, but it was lousy! If I’d waited I would have got an even better price!”

One thing that can help make your customers feel great about taking a discount is to get them to feel they did something to achieve that great price. That could be collecting coupons, answering a simple question, or joining Vipon. Then they don’t feel they were just lucky; instead, they feel they are responsible for having got the deal. Again, the smart shopper feeling is in play.

Car dealers know all about this. A car is a big ticket purchase that customers don’t make often, and they’re likely to be apprehensive about making it. Although cars sell on the basis of a list price, a car dealer will always find some way of offering a discount or giving some type of feature away. That leaves the customer feeling smart, and stops them from getting buyer’s remorse.

You also play with FOMO, of course. For instance, you could offer the discount only on a certain number of sales, or only up to a particular date. If someone’s thinking about buying, but they have been deferring the purchase for a while, or isn’t certain just yet, the availability of a time-limited discount might be just what’s needed to push them into a purchase.

“Only the first 1000 customers” style offers are also great because they make your customer part of a tiny elite – even if it’s just the tiny elite of customers who bought a pack of ballpoints for $9 instead of $10. That’s really affirming the ego-expressive aspect of price as far as they’re concerned!

And of course, if you want to find the greatest number of smart shoppers around, all looking for discounts, look no further than the Vipon community.



Amazon Trends: Advantages and Disadvantages

Some people follow trends, some people make trends, and some people just carry on what they’re doing already.

In business, Apple makes trends, McDonald’s follows trends, and Harley-Davidson (mainly) just carries on being Harley-Davidson.

While it’s easy to disparage the trend followers, there’s nothing wrong with following trends. As an FBA seller, you’re going to perform better if you have an idea of where the market is headed.

One advantage of following trends is that you don’t need to take the big risks that the first player in the market takes. You know a product is beginning to gain traction. And popular items will make you money fast, while giving you great growth potential.

Some trends will continue over a number of years. For instance, the move to healthier eating habits, and the shift to e-commerce and away from the mall, have continued for a decade or more and look set to continue for a while. Build your business in alignment with these trends and you’re securing your future growth.

There are also smaller trends, for instance for particular toys or games, books, TV series, and so on. Think Game of Thrones – parents were actually calling their children Daenerys, Arya, and Bran at one point!

Jump on a trending product, for instance by providing accessories for a growing craft market, or add-ons for a trending toy, and you are riding someone else’s coat tails. You’re selling product that’s linked to an existing winner in the market. That can help a small business scale up fast.

Trending products also give you the chance to make money quickly, rather than with a slow burn.

However, there are also a number of disadvantages.

•      Some trends are real. Others just turn out to be fads. Jump on a fad and you could end up with a load of unsold stock when the market turns.

•      If everybody jumps on the bandwagon, a product can suddenly become very competitive, to the extent that no one manages to make money out of it.

•      You need to be careful about copyright and trademark issues if you’re selling accessories designed to work with another product.

•      Whichever strategy you choose, you’ll need to track trends. Your suppliers can actually be a good source of news; remember to ask them whenever you talk about new products and trends they’re seeing. For instance, if you have a stationery brand, news from your suppliers that neon is going to be ‘in’ could motivate you to launch a ‘glo’ notebook series.

Industry magazines and journals are another good source of ideas, though they tend to be reactive rather than proactive. Following LinkedIn or Instagram accounts in your sector is always a good idea – for instance if you’re in decor, Instagram is a great way to see what’s happening right now.

You might want to visit Oddity Mall, a site which features the latest crazy ideas. Right now its front page has a hippo ottoman, lobster sandals, elephant bookends and unicorn paddle boards. Seeing that, I’m thinking animals are going to be hot; perhaps French cookware like chicken-shaped crock pots and cabbage-shaped soup tureens will be a good seller? Check out the number of views on a product if you like it. It’s easy to see if it’s getting a receptive audience.

Once you’ve got your trend and you’re ready to ride, don’t forget to promote your product. But you’ll find if you’re with-the-trend you’ll be selling to people who want to buy – and they’ll be using all those on-trend keywords.



Boost Your Amazon Sales: FAST

Are your products selling enough? Have sales stalled?

In this article, we are going to share our top 5 tips for boosting your sales on Amazon FBA.

#1 AMAZON PPC

Most likely, you are doing Amazon advertising already. However, most sellers do not optimize the PPC campaigns or use all the strategies available to them. Every sale through PPC boosts your organic ranking for your products leading to more sales. So it is important to make sure your PPC is fully optimized.

For a super quick boost in sales, you can just increase your budget and your bids per keyword. But this is not the most profitable strategy.

The best way is to optimize your Amazon PPC every 1 to 2 weeks. Keep adding extra keywords to your listing & ad campaigns, and remove bad-performing keywords. You can also boost your budget for keywords that are doing well.

It’s impossible to have the perfect advertising setup as ads change every day – but regular improvements can boost your sales and profits over the long run.

#2 Product Promotions

Imagine trying to get a list of 10,000 or 100,000 customers. Building a list of potential customers is hard – but there are existing platforms that help you get in front of millions of shoppers instantly. AMZ Tracker offers the best way to boost your sales with promotions via the VIPON platform – which has millions of people looking for deals on Amazon.

Selling at a promotional price can still be profitable. Also, it is worth listing products on VIPON because these are extra sales that you would not have got otherwise.

#3 Add Some New Products

What if you simply chose a bad niche to begin with? Even if you spend $100,000 on marketing – it might not lead to more sales.

You might try every strategy possible and it is still hard to boost the sales and performance of your Amazon product. If that’s you, then why not try adding new items to your range. Head over to Unicorn Smasher and research products with higher sales volume and low to medium competition.

Adding new products could add $20,000 to $100,000 or more to your monthly sales – by targeting new niches. You could also expand your business by widening your product range. You don’t have to sell the same types of items you are selling. Look for new niches that have higher potential than your existing product.

#4 Partner with Influencers

Does your Instagram have 100,000 followers? Probably not. And it would cost a lot of time and money to build up to that.

Although it is hard to reach influencers with hundreds of thousands of followers, there are thousands of influencers with 10,000 to 50,000 followers in your niche. They tend to be easier to reach, they expect less payment for posting about your product, and usually, they are keener to share new items with their audience.

If 5 influencers with 50,000 followers each promote your product – then you get to reach an extra 250,000 potential customers. And it doesn’t have to cost you much. You could offer a free product and a $50 to $100 amazon gift card to influencers who would be willing to post about your product. Some people will also do it for free. 

#5 Expand Overseas

Amazon has warehouses and online stores in dozens of markets around the world.

If you are selling in Amazon Europe – you could expand to Amazon USA. If you are selling in the USA – you can add your products to Canada and also Europe too.

Amazon is growing at 20% to 30% in different markets around the world. With no extra product development – you could launch in these extra markets and increase your sales almost overnight.

A huge benefit for international sellers is that Amazon is sharing the reviews across marketplaces for the same SKU. If you have some reviews already in the USA – when you launch your product in Europe, Amazon will show those reviews too. This makes expansion faster and easier than it used to be.

Conclusion

There are dozens of ways to increase your sales. Try 1 strategy at a time and focus on that until you get the result you are looking for. If you try each of these tips above you are almost guaranteed to add 10% to 100% to your sales and profits in the coming months.



Amazon: Avoiding The Dangers Of Discounts

Discounts can help you sell your products in volume. They can really help you get started with a new product, shifting enough volume that Amazon’s search algorithm will sit up and take notice.

But discounts can also be dangerous. It’s quite easy for buyers to get used to the idea that your product is only “worth” the discounted rate.

Discounts only really work when the perceived value of your product is higher than the discounted price. If, for instance, you doubled your price and then offered a 50% discount, most buyers would work out that it’s not a great deal.

This is one reason a lot of luxury goods brands, like Hermes or Montblanc, don’t discount. They want to be seen as exclusive, and one element of that is having prices that deter the less wealthy from buying the product. If they are discounted, they might lose some of that exclusivity.

A way of holding special offers that suits this kind of product is a ‘valued customer perk’, whether that’s giving a discount on subsequent orders (for ‘valued regular customers’), a special bag or gift that accompanies the order, or the chance to attend a private sales evening. It can deliver the same value, but it’s differently presented.

You may not want that kind of exclusivity but you will still want to ‘anchor’ the perception of value at your original price. You can do that in a number of ways, by limiting the availability of discounts. For instance:

•      you can limit the discount to a single channel, for instance, Vipon;

•      you can limit the discount to a certain number of units of stock (“When it’s gone, it’s gone”);

•      you can limit the discount to a particular time (Black Friday, lightning deals);

•      you can create conditions that must be met (bulk buy, coupon, first-time buyer, repeat buyer); and

•      on Amazon, you can also limit the purchases in units that each customer can make.

This last option is ultra useful. Sometimes, people will try to buy up your stock at bargain prices so that they can resell on Amazon and undercut your normal prices. By limiting the number of unit per customer, you not only help keep your discount offer discrete, you also stop these nimble sellers from scalping you.

Building up a loyal customer base helps you discount strategically. If, for instance, you sell own-brand leather boots, loyal customers will know your regular price is (say) $110. If you present your discounted sales as a special end-of-line offer, or discount only small sizes, customers will quickly see that you’re not discounting the product line as a whole. And customers who want to get that particular offer will know that the discount is worth having, so they’ll get their orders in fast.

“Free” is a huge motivator that you can use to move stock without discounting, or in addition to a discount. Here again, customer perceptions won’t necessarily match the cost of what you’re giving away. One luxury baggage brand gives a free padlock and key fob with every bag sold. The cost is very small, but customer perception of the “free” gift is very favorable. (A similar giveaway is luxury hotels that don’t discount on price but offer a ‘free’ shuttle to the airport.)

Finally, use your discounts tactically to address particular customer segments or needs. For instance, customers switching to your product from a different brand will be more likely to try your product out if they get a first time discount. You might want to sell off last season’s inventory or encourage existing customers to purchase new products in your range.

There’s no doubt that discounts are a formidably good way of boosting your sales. You just have to use them very carefully, so that once your discount offer is over you can go back to your regular pricing.



Amazon FBA: Make the psychology of discounts work for you

Academic research is often dismissed as … well, ‘academic’. But sometimes it’s really interesting to look at what it has to say. For instance, psychologists have done quite a lot of research into how buyers respond to discounts. They’ve designed experiments that test different discount strategies. That’s just the same as an e-commerce seller doing A/B testing, except that they publish their results.

So let’s look at some of the things they’ve found out. One interesting area is the split between “the same, but cheaper” and “more for the same money”. Existing customers are more likely to be encouraged to buy more if you offer a bundled deal or a multi buy, such as buy two, get one free. On the other hand new customers will be motivated more by a discount; 80 percent of shoppers will try a new brand if there’s a discount.

So discounts are by far your best way of attracting new customers, but you might use other strategies for existing customers. The effect on your margins will be the same, but you’re presenting the deal in a different way.

Different generations also have different attitudes. Boomers are less motivated by discounts, but 70 percent of millennials will look for a deal before buying.

When you’re offering a discount, the exact way you present it matters. The ‘Rule of 100’ says that if you’re selling an item below $100, presenting the discount as a percentage is generally more efficient; “20% off!” rather than “save $2” on a $10 sale, for instance. But above $100, the dollar saving looks a lot chunkier and will generally net you more sales.

Customers don’t always do the math. For instance, if you sell one pair of sunglasses for $50 and let the customer order a second pair at half price, the “half price” message will stick in the mind, even though the actual math is that the customer’s only getting a 25% discount on the order as a whole. Take care to present your discounts the most favorable way for your sales!

Two particular factors can really hook buyers. First, everyone’s a sucker for a discount on top of a discount. For instance, when you’re at the sales and you see the special red marker of an extra 20% off on an item that’s already been discounted 50%, it’s a clincher.

The other thing that really hooks people is urgency. Limited inventories, limited time, flash sales, make people feel they really need to buy now. You’re using FOMO, fear of missing out. That’s very powerful; it works for limited edition luxury goods and Kickstarter, and it also works for discounts.

It’s particularly useful for discounts because the element of urgency can stop buyers feeling that your goods are always going to sell at a discount. All of us know shops that have a special sale every single week of the year; would we ever pay full price there? Whereas a top brand retailer dropping prices for just a single weekend is a huge incentive to go out and bag a bargain.

The other thing that a discount coupled with a sense of urgency does is to stop customers looking elsewhere. They don’t want to miss the saving because they were too busy comparing prices! That’s why if you use Vipon to promote your discounts, customers aren’t going to click around Amazon trying to find a better deal!

And getting a discount makes customers feel happy. Psychologists have found that their oxytocin levels increase, which gives them a great feeling!