Your 10% coupon costs 22%

In January you ran a 10% coupon to move velocity on a branded-search SKU. In August you're planning the Q4 stack, and the January coupon is still setting your reference price.

Here's the calculation nobody runs before turning a coupon on.

You sold 400 units during the promotion. Your trailing baseline was 350. You did not discount 400 units to gain 400 units. You discounted 400 units to gain 50, and handed the other 350 a price cut they never asked for.

Velocity Sellers pulled coupon data across 240 brand audits in the first half of this year. On branded-search-heavy SKUs, roughly 40% of redeemers would have bought at full price anyway — which turns a headline 10% discount into an effective 18–22% cost on the units that were actually incremental. At six months, their data shows that share climbing toward 70%.

At that point the coupon isn't a promotion. It's a permanent price cut with a badge on it.

A coupon on top of a Deal, with Subscribe & Save running underneath, and a Prime Exclusive Discount layered for the event.

Each one was approved by somebody looking at a single lever. Nobody was looking at the unit. Velocity's audit work found brands handing back 35% or more per unit across three simultaneous discounts, none of which looked excessive in isolation.

The Seller Central dashboard will not catch this. It reports units and revenue. Neither number tells you whether the promotion made money, because both go up in exactly the scenario where you lost the most — high redemption, low incrementality.

Three numbers do tell you.

Incremental units against trailing baseline, not total units. Total contribution margin dollars period over period, not units. And post-promo behavior: did organic rank hold, or did volume fall below baseline once the badge came off, because you taught the buyer to wait?

That last one is the expensive one. A brand running coupons every month hasn't built velocity. It has trained a purchase pattern, and the pattern now requires the discount.

The free levers still exist. Brand Tailored Promotions and Prime Exclusive Discounts both target customer segments without a per-redemption fee. If you're testing whether a discount drives incremental volume at all, test there before paying for a coupon.

Fees step again. Industry reporting points to average per-unit FBA increases in the range of $0.08 for the coming cycle. Immaterial on one unit, material at six figures of annual volume, and it lands on top of the July 1 storage schedule change.

EU referral fees came down. Several categories were reduced this year, including apparel and accessories at or under €15 moving from 8% to 5%. If you run one price sheet across US and EU, that reduction didn't reach your margin. It went to the buyer.

Before a single Q4 promotion gets approved, build the stack sheet.

One row per SKU you plan to promote. Columns: planned coupon depth, planned Deal depth, active Subscribe & Save discount, planned PED, and a total stacked discount percentage per unit. Then one more column for trailing 30-day baseline units.

Anything where the stacked total clears 25% goes back for a second look before it's scheduled. Anything where the baseline is already strong gets the coupon cut first — that's the SKU where redemption and incrementality are furthest apart.

Artifact: a one-page Q4 stack sheet with a total-discount column and a baseline column.

A coupon is not a discount on the units it wins. It's a discount on every unit that was already coming, plus a smaller discount on the few it added.

Price it on that basis and most of your Q4 calendar changes.

See you Friday, Dan

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— Dan