In the fast-paced world of Amazon selling, even small mistakes can lead to huge financial losses. Recently, a seller experienced a devastating $18,000 loss overnight due to a mistake made by a Virtual Assistant (VA) while setting up a series of coupons and promotional offers. Here’s how the error occurred and how setting a minimum price fail-safe can prevent similar disasters in the future.
The Mistake: Misconfigured Coupons and Promotions
The mistake happened when the VA was tasked with setting up a batch of coupons and promotional discounts to increase visibility and sales. However, due to a lack of checks and balances, the coupons were mistakenly set at an incorrect price—one that was far lower than intended. The result? The seller’s products were essentially being sold at a steep loss, significantly affecting profit margins.
The error was particularly costly because it occurred overnight, during which time several high-ticket items were sold at the wrong price. By the time the seller noticed the issue, they had already lost over $18,000 in revenue.
The Solution: Setting a Minimum Price to Enable a Fail-Safe
To avoid this kind of disaster, the seller took action to set up a minimum price fail-safe when creating coupons and promotional offers. Here’s how this failsafe works:
- Set a Minimum Price Limit: When configuring coupons or running promotions, ensure that there is a set minimum price that your product can never fall below. This prevents any accidental deep discounts that might push the price lower than your break-even point. For example, if your product costs $50 to produce and you want to make a profit margin, set the coupon or promo minimum price to something higher than that.
- Automatic Price Checks: Amazon allows you to use tools to ensure that the discounts and promotions you create don’t drop below a specific threshold. These automatic price checks can serve as an added layer of protection to avoid promotional errors that might lead to significant losses.
- Use Alerts and Notifications: Set up email alerts or notifications for when promotions are live or when any changes occur to the pricing settings. This will give you an immediate heads-up if something goes wrong, so you can make adjustments before large volumes of products are sold at the wrong price.
- Review and Test New Coupons: Always double-check and test any new coupons or promotional offers before they go live. By reviewing the offer carefully, you can prevent errors like setting the wrong discount percentage or accidentally creating coupons that don’t align with your pricing strategy.
- Delegate with Clear Instructions: Ensure your team members, including VAs, understand the importance of accurate pricing and coupon management. Establish a clear process for setting up promotions and set guidelines for double-checking work. This will reduce the chance of human error during busy promotional periods.
Preventing Future Losses
By setting a minimum price fail-safe, the seller is now protected from situations where a VA or other team member may inadvertently set up a discount that could cost thousands in lost revenue. This simple step helps maintain profitability even when experimenting with different promotions or coupons.
In conclusion, the $18,000 loss experienced by the seller was a painful reminder of the importance of price control when running promotions. By setting a minimum price limit and using fail-safes, sellers can ensure they avoid costly mistakes, maintain their profit margins, and keep their Amazon business running smoothly.