How Amazon coupons actually cost you money
Coupon budgets are not just the discount. Here is the arithmetic including Amazon's redemption fee, how coupons stack with other deals, and the conditions a product has to meet.
By Alex Tkach, CEO & Co-Founder
Check before you act. Amazon programme rules, fees, and thresholds in this article were last verified on 19 January 2022. Amazon changes them without notice. Confirm current figures in Seller Central.
Coupons are a way to increase sales and, in our work, a useful tool for earning organic reviews. They are also routinely mis-budgeted, because the discount is only part of what you pay.
How the budget is really calculated
The budget you set is split between two costs: the discount you give the customer, and a redemption fee Amazon charges on each purchase.
The arithmetic is:
(discount × number of redemptions) + (redemption fee × number of redemptions)
So a $4 coupon on a $25 product, redeemed by 50 customers on day one:
($4 × 50) + ($0.60 × 50) = $200 + $30 = $230
Sellers who budget only for the discount are consistently short by the fee.
Coupons stack with other discounts
Budgets from multiple offers are added together. If a Lightning Deal gives 20% off an ASIN and that same ASIN also carries a 5% coupon, the customer gets 25% off. This is a common way to give away more margin than intended.
Eligibility
- The discounted price must be at least 5% below the lowest price of the last 30 days.
- Products with 1 to 4 reviews need a minimum rating of 2.5; products with 5 or more need 3.0.
Practical notes
Test with a short window first, for example a few days or weeks, then adjust the value and duration once you can see the effect.
Non-standard discount values are worth trying: 17% rather than 15% can stand out against competitors running round numbers.
About six hours before the scheduled start, the coupon locks for editing. You can deactivate a coupon at any time from the toolbar.
You can create coupons one product at a time or in bulk via the bulk coupon page in Seller Central.
Coupons and advertising together
Once a coupon is live, you can run advertising against those ASINs to lift search position and page views. The coupon badge improves click-through on ads that are already running, which is usually a better use of the discount than leaving it to organic traffic alone.