Last week I ran a poll on LinkedIn asking how brands plan to participate in Prime Day 2025 compared to previous years. The results paint an interesting picture:
- Going Bigger: 12.50%
- About the same: 35.7%
- Scaling back: 37.5%
- Skipping it: 14.29%
That means over half (51.79%) of respondents are either scaling back or skipping Prime Day entirely this year - a significant shift from the all-in approach we've seen in previous years.
Why are brands pulling back from Prime Day 2025?
I don't need to spend a lot of time telling you why brands aren't jazzed about rolling out discounts or pumping up ad dollars. Many 3P sellers in particular say they are choosing to sit out Prime Day this July 23rd. New tariff costs (or at least, uncertainty) have made discounting financially unfeasible for many.
3P sellers made up 60% of items sold in the fourth quarter last year, so this pullback threatens to limit the selection of Prime Day discounts available to members.
Other reasons for the pullback:
- Advertising continues getting pricier, with Sponsored Products CPCs rising 12% during Prime Day 2024
- Amazon's total fee structure, while mostly unchanged for 2025, remains at historically high levels compared to pre-pandemic years
- Prime Day 2025 will be the first four-day U.S. event, and they have already begun promoting "early deals", meaning that the budget that once powered a 48-hour flash now has to stretch further
Three Cases FOR Prime Day Participation
Despite these challenges, there are a few compelling reasons for brands to consider participating.
1. The Hidden Review Advantage
Jason Landro, founder of the agency Nectar points out an often-overlooked benefit: "If you 20x or 50x your units ordered in two days, you should be able to 20x-50x your review rate on each PDP accordingly. That's huge for a rankings boost."
This residual benefit can propel products forward long after Prime Day ends.
2. The Halo Effect Is Real
Data from agency Envision Horizons in 2024 showed:
- Even brands not directly participating in Prime Day saw a 60% sales increase compared to average days
- Brands experienced a 45% increase in Return on Ad Spend during Prime Day, despite higher competition
3. Prime Day as a Strategic Product Marketing Laboratory
Katherine McKee offered this valuable perspective: "The point of Prime Day, from Amazon's perspective is to get people in the door and to sign up for Prime. It's not to dump units. They are in the data game... That is your goal too. Use Prime Day to scale, not to move old units."
Katy recommends a data-driven approach focused specifically on medium-demand products:
Don't use PD to dump aging stock (run an off cycle deal yourself)
Don't promote your heroes (even though this is what your VM told you to do, because that's what's best for Amazon)
So why focus on middle-tier products? Katy identifies that Prime Day provides the perfect laboratory to answer critical product questions:
- Do you know WHY it's a medium tier good?
- Do people not know it exists or does it not have product market fit?
- Is your pricing off?
- Is your page set up poorly?
- Is awareness your primary obstacle?
If awareness was the primary obstacle, you'll find out since demand will continue to trend upwards.
Amazon's Position
While these challenges affect third-party sellers significantly, Amazon itself maintains an optimistic stance. An Amazon spokesperson said the company is having a "strong response from selling partners to Prime Day 2025."
The Bottom Line
Prime Day 2025 presents a more complex calculation than ever before. For sellers with China-dependent supply chains, the tariff impact may make participation impossible. For others, strategic participation focused on data collection and review generation rather than pure sales volume might still deliver long-term value.
What's clear is that the days of automatic, all-in Prime Day participation are ending. Brands are becoming more selective, strategic, and measured in their approach to Amazon's tentpole events.
Remember that you can listen to every one of my blog posts as a podcast, every morning at 6AM ET!