What is Amazon Prime Day?
Amazon Prime Day is the company’s annual sale when they offer large discounts on selected items.
Discounts may be in the form of price cuts or free bonus products.
Some offers are available for the entire 48-hour period, while others are featured as “lightning deals” — that is, deals that are available only for a limited time.
In 2022, Amazon Prime Day grossed an estimated $12 billion dollars, up from $9.55 billion at the previous year's sale.
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Read MoreIs Amazon Prime Day for members only?
In order to take advantage of the specials, you need to be an Amazon Prime member. The company boasted 200 million members as of 2022.
Amazon offers a free one-month Prime trial in most areas, assuming you haven’t received the trial within the past 12 months.
Since February 2022, a standard Amazon Prime membership costs $14.99/month plus tax, or $139/year. This is an increase of 17% from its previous price of $119/year.
And Amazon wants you to be a member.
Members spend more on Amazon than non-Prime members and shop there more often.
According to one Bank of America study, during the early days of the pandemic Prime members spent nearly four times as much money on Amazon than non-members.
Watch out for sneaky price changes
Amazon is a leader in “dynamic pricing” — its system of rapidly updating prices based on supply and demand has even been the subject of academic studies.
Amazon can view real-time supply-and-demand numbers and adjust their prices almost instantly. The company reportedly changes some prices as frequently as every couple of minutes.
So if you’re eyeing a particular product to buy on Prime Day, keep an eye on its price in the days leading up. You might notice that the original price on the day of the sale is higher than what you might have paid before.
While the new, discounted price might still be a deal, it might not be as substantial as it initially appears.
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Explore better ratesCan you afford the savings?
The economic climate is tough at present, with fears that another recession is upon us.
A report released late last yeart from the National Research Group showed that despite rising prices and other financial pressures, Americans are more likely to cut back spending on groceries, dining out and clothing rather than cancel services like Amazon Prime and Netflix.
But before you pull out your credit card on Prime Day, ask yourself whether you can afford to pay off the balance right away.
Interest rates are rising, and so is consumer debt. The first quarter of 2023 saw the total national household debt rise 7.65 percent to $16.5 trillion over the previous year. This is a significant rise from the pre-pandemic debt level of $14.14 trillion.
In its most recent Consumer Debt Review, Experian found the average consumer was carrying $5,910 in credit card debt. That's an increase of 13.2% since last year. At the current average interest rate of 20.92%, the cost of holding that debt would be over $1,200 per year.
If there is an item that you’re pining for, consider some of the following buying tips:
- Set a limit to how much you want to spend. To ensure you don’t go over that amount, you can purchase Amazon gift cards in advance of Prime Day and only use the gift cards for what you buy.
- Before Prime Day, add an item you want to your Amazon Wishlist. Using the Amazon mobile app, turn on Watched and Waitlisted Deals notifications, and wait for a deal on the item you want to pop up.
- Check who the seller is and for any hidden costs. You might see a deal that you think is too good to be true. Some third-party sellers add hefty shipping or importing fees, pushing the price well over what you wanted to pay.
Alternatives to Amazon Prime Day
Just because there is a lot of noise surrounding the newly added sale, it doesn’t mean that it’s the best deal in town.
Walmart didn’t offer Deals For Days this year, but it has been offering discounts and Rollbacks (90-day sales) on many items throughout the year.
Target, Best Buy and Lowe’s typically offer huge discounts leading up to the holidays as well.
Many big retailers, such as Bed Bath and Beyond, also offer price matching for online sales, so you can show them the Amazon Prime price and get the same product for the same deal.
And with the economy struggling, you might consider shopping local and supporting a small business.
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