Lately there have been several highly publicized incidents where sellers have lost all of their inventory to “buyers” who use a discount code that wasn’t meant for the public.
People pour their life savings and their future into building a business. Unfortunately there are people out there just waiting to take it all away. In the most recent case the person who “bought” all of the inventory was a high-profile amazon service provider, which makes the sting even worse. He’s going to suffer huge losses from his business because of this, and I can understand why.
All of that said, if it wasn’t him, it would have been one of the thousands of other faceless people out there who scour the internet looking for “too good to be true” deals and snatch them up.
When I first started this business in 2014, there were organized groups of buyers who were doing this. They’re still out there waiting for the opportunity to take advantage of your mistakes.
It’s Up To You To Protect Your Inventory
If one thing is obvious to even the most casual seller, it’s that Amazon didn’t design a system with ease-of-use and protecting sellers in mind. It’s a powerful system, but if you’re not careful you can easily get yourself into trouble without meaning to.
It’s a harsh truth; no one cares about your business more than you do. If someone buys up all your inventory using a discount and you complain to Amazon, you’ll find that they consider these to be valid sales. Why? Because you created the promotion, and in business you’re responsible for your decisions and actions.
I’ve created this guide to help you avoid making this costly mistake.
Claim Code Types on Amazon
Single Use
Single use discount codes are your friend. These codes can be restricted to a single use by the customer, and each code can only be used by one customer.
Awhile back every “single use” discount code also had a super-secret GROUP discount code associated with it. People would accidentally publish THAT code on their product page, and buyers would get their inventory for nearly free. Amazon has changed this, so the risk of accidentally losing your inventory with single-use codes is greatly reduced.
Group
Group claim codes are generally short and easy to remember. They can be used over and over again by every customer on Amazon. A common off-amazon example is an advertisement you might see on a billboard or in a catalog: “Use coupon code FREESHIP to get free shipping at checkout!”
None (no claim code)
If you use “none” for claim code, your discount will be applied to every single customer who buys your product, under the conditions you set up. So if you set up a 20% off discount, with “none” for the claim code type, every order that meets the conditions will get 20% Off.
I often have “Buy 2 or More and Get 10% Off Your Entire Order” promotions going on – I don’t use a claim code for that, because the rule is they have to buy 2 or more, and that makes me happy.
Protecting Your Inventory With Group Codes
A Guideline for Group Codes
If I had one rule to live by that would help new sellers, it would be this:
Never make a group code unless you would be happy to sell all of your inventory at that discount under the specified conditions.
Just because you don’t publish it on your Amazon Product Detail Page or in a public forum doesn’t mean it won’t go public. Users submit coupons to deals sites. People forward e-mails and copy/paste conversations, and eventually it will get out.
As you grow your business this becomes more important, so develop good habits early.
Displaying Your Claim Code On Your Detail Page
Amazon’s system was designed primarily for public promotions. That’s why by default, all group codes display on your product detail page.
You have to go in and turn it off.
Step 1: Click “Customize messaging” – The option you need doesn’t display by default
Step 2: UNCHECK “Detail page display text” to TURN OFF the display text on your product detail page.
- Box Checked = Default Option = Show The Discount Code
- Box Unchecked = Hide The Discount Code
If you choose to display the discount code on your page you can customize the text by clicking “Customized Text” and entering your own details to display.
Limiting Units A Customer Can Purchase At Discount
Single Use/One Redemption Doesn’t Mean 1 Unit
This is the mistake that causes most people to lose their inventory. Just think – you want to offer a 95% discount so you can generate sales velocity, but you only want each customer to buy 1 unit. On your $20 product, they’ll only pay $1. If you haven’t set your “Max Order Quantity” on your product customers could buy up to 999 units at 95% off, instead of just the 1 unit you intended for them to buy! Now that could lead to a very bad day.
Limit Your Max Order Quantity
Whatever you set your Max Order Quantity will be the maximum number of units a customer can buy in a single order.
During one of my launches I got a message from a full price customer who wanted to buy 20 units because he was giving my item as a grooms gift at his wedding. If he hadn’t contacted me, I would have missed out on a significant sale! So while you’ll want to set this while giving discounts, you’ll want to set this number strategically.
I often set my Max Order Quantity to 1 during the launch, and then when I stop actively running promotions I remove it, or set it higher than the number of units a person would realistically buy.
To set Your Max Order Quantity:
Note: I’m told there are categories where Max Order Quantity does not appear in the Edit Offer screen. For these products, you can still update the Max Order Quantity, you’ll just need to do it through a flat file upload. That’s more complicated, and we won’t be covering that process here today.
Step 1: Click Inventory->Manage Inventory
Step 2: Edit your Product Offer
Step 3: Click the “Offer” Tab
Step 4: Scroll down to “Max Order Quantity” and set the number of units your willing for someone to be able to purchase in one order
Claim Code Combinability
Combinability determines how promotions are applied to your customer’s purchases when multiple promotions match the purchase in checkout. For example, if you had 2 different offers for 50% off each, you probably don’t want them to combine for a total of 100% off.
Offers with No Claim Code
The first thing to recognize when setting up your promotions is that all three coupon code types, preferential, unrestricted & exclusive DO combine with every promo that has no claim code.
Example:
Coupon 1: 40% Off No Claim Code (none) – entire purchase for Kitchen Gadgets
Coupon 2: 20% Off Single Use – Garlic Press (any type of combinability)
When the customer adds the product to cart, Coupon 1 will automatically apply. When the customer puts in the single use coupon for Coupon 2, it will give an additional 20% off, for a 70% discount, Total.
Combining Preferential, Unrestricted & Exclusive Codes
This is an area where the Seller Central documentation does a decent job explaining it. Check it out Here.
Don’t Let Fear Hold You Back
Sure, there are lots of horror stories out there – but now you know what you need to know to protect yourself. You can create your promotions and move forward with confidence that you know how to protect your inventory.
