The Prevalence and Effectiveness of Price Promotion on Amazon

The intention and effectiveness of sales promotion are important topics for manufactures. In this paper, I studied the relationship between sales rank and price promotions for appliances and shoes on Amazon. The results show that for appliances, the price tends to remain low in the long term after promotion, while the improvement in sales rank is quite significant. Conversely, for shoes, the price bounces back quickly after promotion, while the improvement in sales rank becomes rather opaque in the long run. This divergent behaviour of the sales rank may be explained by the difference in reason for launching the promotion. While the primary aim for appliance sellers is to increase brand recognition, the shoe retailer is more likely to be clearing inventory because of the fast changes in fashion trends.