Is 20% off worth it for Amazon Black Friday deals?

Should you give Amazon 20% off for Black Friday?

There are many brands that go into a deal event thinking of it as free extra sales, and in our experience, this is rarely what actually happens. Amazon sets the minimum discount, your competitors follow suit, and nobody really gains anything over anyone else.

With the discount, you have a chance to stay where you are. We have had this very conversation with Eleva Nutrition, Purist Scalp Care and Enroush, which are three brands that we manage.

Each of them needed at least 20% off to get into Prime Big Deal Days, and we were upfront that the discount was a defensive move to keep their visibility, not a way to make more profit.

This is also why we decide product by product rather than putting the whole catalog in the deal. If the product still clears your margin floor after you take off the discount, fees and the ad cost, it goes in.

However, if the profit becomes zero or negative, we ignore that product and also ignore lower-priority products that had thin margins in the first place.

What does Amazon's minimum discount actually require?

All of the rules apply to deals on Seller Central, and each minimum is based on the reference price for the product. In its announcement for Black Friday and Cyber Monday 2025, Amazon set a minimum of 20% for Lightning Deals, and a minimum of 15% for Best Deals and Prime Exclusive Price Discounts.

Earlier, its August 2025 holiday guide added that Best Deals at 30% off or more could get extra merchandising.

This year, Amazon’s Holiday 2026 update says there are no new eligibility requirements, and the same minimum still stands. The only changes are to their fee. Now, the deals cost the same as Prime Day, which is $100 per promotion plus 1.5% of promotional sales, capped at $5000 instead of the flat fees that sellers paid in 2025.

There is one additional rule that determines your deal price. Amazon tries to offer the lowest price for its deals in the last 30 days and the “was” price is the median price that customers paid in the last 90 days.

In short, this rule means you should base the discount on what your shoppers have paid recently, not your list price.

You can still see the minimum discount as your entry ticket to the event, so it gets your product in the door, but the fees are still added on top. This is why you need to make sure to check the current minimum and fee in Seller Central before you submit anything.

Why can a 20% discount wipe out your margin?

Simply put, the whole discount comes off your profit, and all your costs stay the same. This is the formula we use for each of the products:

Here is precisely how it looks with an example with made-up prices.

Let’s say you sell a product for $40, and your product cost plus Amazon fees total $26, with an additional ad cost of $4 per unit. At full price you are making a $10 profit on every sale, which is a 25% margin. For the deal fees, we are assuming that you sell 200 units during the event.

When you discount your products by 20%, $8 of the total $10 is gone even before the deal fees are taken. And then the fees take about half of what you have left. A 25% discount and you’re at zero before the fees and you’re losing money on every unit once you factor in those fees.

If you use Fulfillment by Amazon, your costs will increase during the event as well. Amazon’s holiday peak fulfillment fees run from October 15, 2026 to January 14, 2027 and add roughly $0.32 per unit on average. That might not sound like a lot, but on a product already down to $1 of profit, it makes a big difference.

We walked a beauty brand through this exact math on a client call. The margin on the brand was around 25% and it was considering a 20-25% discount, but once we did the math, it meant no profit on every unit sold during the event.

This scenario is the exact situation we show in the 25% column of the table above.

How to calculate your margin after an Amazon discount

When we sit down with a brand before Black Friday arrives, we do a simple profit check, which involves one row for each product in the catalog. You can also do the same on your end, because it takes less time than you would think.

First, make sure to understand what the deal price is. To make this calculation, take the present price and multiply it by (1 minus the discount). From that number, subtract the product cost and Amazon fees per unit, and if peak fulfillment fees apply to you, those are subtracted too.

Then subtract your ad cost per unit from the last 30 days, 1.5% of the deal price, and $100 divided by the number of units you expect to sell during the event. The number you arrive at is your profit per unit, which you compare with your margin floor.

If it falls below that floor, the best move is to remove that product from the deal and keep it at full price.

Does a 20% discount guarantee more sales?

Not really, and this is where many sellers make a mistake. If your competitors do the same deal, you give away a fifth of your price without any promise of any extra volume. What you do is keep your organic position, because keeping your sales steady during the event is what keeps your rank in place after the event ends.

But real volume still counts. For example, Enroush says Prime Day generated 1.5 to 2 times the sales of a normal day. The team thought of restricting the discount to high-margin products only but then decided to extend it to everything that had stock.

The strategy only works if all the products in the deal pass the margin check first, and the trick wouldn’t work if the catalog had 25% margins.

Should you raise bids on discounted products?

Not usually, because the discount is already selling for you. Besides, it lowers your break-even ACoS, which is the level at which your ad spend, expressed as a percentage of the price, leaves you with zero profit on the sale.

In the example above, the break-even ACoS drops from 35% (at $14 before the ads on a $40 price) to 18.75% (at $6 on $32). So a bid that was profitable last week can lose money on every ad sale during the deal.

One of our clients, Capalbo’s Gift Baskets, which sells on Amazon and its own website, asked us exactly this before a Prime event. Gift baskets weren’t going to have a 30% discount like other categories would, so paying more for ads just to be seen didn’t make much sense.

We left the bids where they were and saved the money for better times. For the campaign side of the event, see our Black Friday and Cyber Monday Amazon Ads setup.

As the deal is running, monitor TACoS, which is your ad spend divided by your total sales, every single day.

How we decide which products go into a deal

Before anything gets submitted, we do the margin math. Once the event is live, our in-house platform, Olifant AI, flags wasted spend so our specialists can cut it the same day.

First, we pull the real cost and margin on every product, because the discount Amazon suggests doesn’t take your costs into account. Then we model the deal price with the above formula, at 20% discount and also at 30% for any Best Deal.

Then, we pull every product that has zero or negative profit, as well as thin-margin products lower on the priority list. We set the bids before the event starts and keep them flat unless the break-even ACoS still has some room after the discount.

Stock is the final test; if the product sells out halfway through the deal, it will lose the rank it is supposed to protect, so this step is as important as the math.

We suggest doing this check when you submit and again a week before the event and then tracking profit per unit on a daily basis as the deal runs.

For listings and everything else that you need to handle this season, use our Q4 and Black Friday preparation checklist together with our guide on bidding against break-even ACoS.

From our accounts

All four rows in the table below are brands we run.

As you can see, the call was different for each brand, and in each case we did the numbers first before saying yes or no to the deal.

Frequently asked questions about Amazon Black Friday discounts

How do I decide what my margin floor should be?

Your margin floor is the least profit margin you're prepared to make per unit on a sale. It has to cover more than the cost of the product itself. Returns, storage and the time your team spends on the account all come out of what is left. For most accounts, brands look at their typical monthly costs and set the floor.

They don't just pick a round number. With that figure, the Black Friday decision is a lot easier, because every product either clears it or it does not.

Can I raise my price before Black Friday so the discount looks bigger?

Such a strategy won’t help you, and it can hurt you. Amazon wants a deal to be the lowest price in the last 30 days at least.

The “was” price is the price paid by customers for the product within the last 90 days. A price you raise a few weeks before the event doesn’t change what shoppers paid before that. It can also mean lost sales during the weeks you are sitting at the higher price.

What should I do with the products I leave out of the deal?

Keep them at full price and keep advertising on the keywords that are already converting.

You get a lot of shoppers who come into your store for a sale item and they look around and a few will buy something at full price while they are there. Also monitor inventory on these products.

Even if a product is not on the deal, it can move quicker than normal in a busy week.

Is Prime Big Deal Days worth it for sellers?

One thing to know if you are planning for Black Friday: Amazon says its 30-day and 60-day lookback periods do not include promotional prices from Prime Big Deal Days.

So an October Prime Big Deal Days price does not lower the deal price you need for Black Friday. Whether the event pays off still comes down to the margin of each product you enter.

What should I check once the Black Friday deal ends?

Check your organic rank on the products that were in the deal. The main reason to join was to hold that rank, so you want to see that it stayed in place after the price went back up.

Then compare the actual profit you made per unit with what you planned before the event. That tells you which products are worth bringing back next year and which ones to keep out.

Final thoughts

Before you send anything out, do the per unit math on every product at the deal price and make sure you include the deal fees and the peak fulfillment fees. Remove anything that ends up at zero profit or below and decide your bids before the event starts, not during it.

Submit before the deadline Amazon shows in Seller Central, and check your numbers again a week before the event.

If you’d rather have a team run this math on your catalog and decide what goes in, that is part of how we run Amazon PPC with profit in mind every day at Olifant Digital. You can also get your free marketing plan to see how we would handle your account.