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Amazon Tries Its Luck by Offering Sweepstakes Service to Others

Amazon.com launched a new marketing tool for businesses called Amazon Giveaway that lets them easily setup and run sweepstakes. Amazon doesn’t charge online merchants or others who wish to run a contest, but it doesn’t need to: businesses are limited to offering Amazon products as prizes, so it will benefit by selling more products.

Marketing promotions are popular especially now that anyone can promote them through social networking sites such as Twitter and Facebook. But there are laws about running sweepstakes and contests – this article published (in PDF format) on the website of Jones Day law firm points out the pitfalls. Presumably Amazon Giveaway takes care of all the legal requirements.

In its press release about the new service, Amazon Vice President of Consumer Marketing Steve Shure said, Amazon Giveaway takes care of the complexities of running sweepstakes, “from setting up all of the rules to shipping prizes directly to winners.”

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It’s a smart business model for Amazon and is in keeping with the way it thinks about services. From Amazon Web Services to Fulfillment By Amazon, the company takes what it does well in its own ecommerce business and leverages that expertise by selling easy-to-use services to other companies, whether they are competitors or not.

Amazon Giveaway combines five features into one solution that includes:

  • Selecting and purchasing prizes;
  • Hosting the giveaway and determining winners;
  • Shipping prizes to winners;
  • Handling certain income tax reporting;
  • Providing metrics.

It’s up to the host to build awareness of the promotion.

Amazon Giveaway currently supports two contest models:

A first-come, first-served awards prizes to the first set number of eligible entrants. This model encourages entrants to respond quickly and the giveaway ends when all prizes are claimed.

Lucky number awards a prize to every set number to enter. For example, every 25th entrant wins, up to 10 total winners. This model generates more entrants, the giveaway is likely to last longer, and is more suited to growing Twitter followers, Amazon explained.

Amazon said hosts purchase the prize on Amazon.com and pay for estimated sales tax and shipping cost to the winner – Amazon refunds any excess when the giveaway ends.

The word “giveaway” is used more than a million times every day on Twitter, YouTube, Instagram, and Facebook, according to Amazon. “Everyone from authors, aspiring artists, non-profits, brands, bloggers, social media gurus and more, can now use Amazon to create a giveaway, choosing prizes from millions of eligible physical items. Amazon Giveaway is an intuitive tool that allows anyone to create and host their own giveaway, to generate awareness and reward their audiences.”

Anyone who wants to host a giveaway can visit amazon.com/giveaway. Or, they can find eligible items on Amazon.com and click “Set up a giveaway” near the bottom of the product detail page. “From there, the host determines the giveaway details, enters custom content and decides whether prizes will go to many entrants or to the first few entrants. Hosts receive a unique link that they can share with their audiences how, when, and where they choose.”

Amazon ships the prizes to the winners. As many as 50 prizes can be awarded per giveaway, with a total value of up to $5,000.


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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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