Complete Guide: Thorough Explanation of Amazon Subscribe & Save Mechanism | Strategy for Maximizing Discount Rate and Improving LTV

In the purchasing experience on Amazon, one of the most efficient cost reduction methods is "Amazon Subscribe & Save". In this article, going beyond the framework of a mere discount service, we explain in detail the mechanism based on Amazon's algorithm and consumer behavioral psychology. We organize the logic to realize maximum 15% OFF and the flexibility of cancellation/change in MECE (Mutually Exclusive and Collectively Exhaustive) manner, and provide practical knowledge useful for beginners to EC managers.

1. Structural Merits of Amazon Subscribe & Save

Amazon Subscribe & Save (Subscription Commerce) is an automatic delivery program targeting consumables and products with high repeat demand. The biggest feature is that products are automatically delivered based on the specified interval (2 weeks to 6 months) just by the user setting it once. This mechanism often applies shipping fee preferential treatment even to non-Amazon Prime members, acting as a very economical purchasing channel.

2. Tier Structure of Discount Rate: Conditions for Maximum 15% OFF

The discount rate of Subscribe & Save adopts a "tier structure" that fluctuates depending on the category and number of purchased items. The standard discount rate is 5% to 10%, but by applying "bundle discount" that combines 3 or more types of products on the same delivery date, maximum 15% OFF is realized. This is a mechanism that can be said to be cost reduction from Amazon side that improves consolidation efficiency of logistics.

3. User Benefits and Inventory Turnover Rate for Operators

For consumers, "prevention of forgetting to buy" and "optimization of expenditure" are the biggest benefits, but from a business operator's perspective, maximization of LTV (Customer Lifetime Value) and improvement of accuracy of inventory forecast can be expected. Note that due to Amazon's dynamic pricing, the price at the time of shipment is applied, but including point return by continuous use and coupon application, the superiority in total cost is unshakable.

4. Flexibility of Operation: Process of Skip and Cancellation

Against the common concern of subscription that "once contracted, cancellation is difficult", Amazon provides extremely high flexibility. Users can cancel with 1 click or skip delivery date at any time from My Page. Purchasing only the first order at a discount price and then immediately stopping it is not restricted by the terms, and this accessibility contributes to the improvement of usage rate.