Amazon brought coupons to Seller Central in 2017, but these aren't your grandmother’s coupons. We go over how to create coupons on Amazon, and the pros and cons of doing so.

In this episode we’ll give you the lowdown about how sellers can create coupons on Amazon. What steps do you need to take, and what are the pros and cons of Amazon coupons?

According to the Online Etymology Dictionary, the original 1822 meaning of the word coupon was "certificate of interest due on a bond," or a piece that could be cut from a bond and presented for payment. Coupons later became something people cut out of newspapers and magazines for discounts. The first coupon is believed to have been a ticket for a free glass of Coca-Cola, and was offered in the late 1880s.

Amazon brought coupons to Seller Central near the end of 2017, likely as a way to boost sales and motivate sellers. But these aren't your grandmother's coupons. And they aren't your ordinary promotional codes either. So what should Marketplace sellers know about how to create coupons on Amazon Seller Central?

Learning how to create Amazon seller coupons is actually pretty easy, and setting them up requires only a few steps. Let's go over them now.

The first step to take is to log into your Amazon seller account.

Then click on "Advertising," followed by the word "Coupons" in the drop-down menu. An intro page should appear for first-timers with some basic information, including a video that will help to walk you through the process. Follow the steps up to "submit your coupon"; then Amazon will review the coupon before it goes live.

The next thing to do is decide on coupon limitations.

Amazon allows you to limit the number of coupon redemptions per customer. Alternatively, you may allow the same customer to use your Amazon coupon multiple times. You can also target customers by specifying Amazon Prime customers only, or select for any buyer at all on a given Amazon seller coupon. You must also decide how long a coupon will be available — anywhere between one and 90 days.

Another step to take before creating your first Amazon seller coupons is to set your budget.

Decide in advance what your budget is going to be and make sure you set it. Amazon will deactivate your coupon as soon as that limit has been reached, so you won't have to worry much about going over budget, though that could still happen. According to Amazon Seller Central, they'll actually take your coupon offline once your budget has been 80 percent utilized.

Make sure you decide how many items you want discounted, too.

You can use either ASINs or SKU numbers to create coupons. And according to Amazon Seller Central, you can enter up to 200 parent ASINs to run a coupon on.

The final step you'll want to take is selecting your discount type.

You're able to discount an amount of money off a product, or a percentage. According to experts, either is attractive to buyers, and which to use may depend on the price point of the item you wish to discount. Consider this: five dollars off and 25 percent off a 20-dollar item is an identical amount, but buyers might perceive 25 percent as a greater discount. Therefore, they'll be more likely to shop the item with those savings rather than a simple 5 bucks off.

Now you know how to create Amazon coupons, so let's move on to what's good and bad about them.

First we'll go over the pros of creating coupons.

The biggest benefit of using Amazon seller coupons is the visibility they can achieve for your products. One extra advantage is that Amazon seller coupons are discoverable on the platform. A green banner calling out each coupon shows up next to listings on Amazon search result pages. And a coupon will appear in your listing with an orange icon that helps your product to stand out.

Amazon also features items discounted with coupons in their Today's Deals section. Additionally, coupons are shown to improve customer conversion rates — or the number of sales you net per page visit.

So what's the catch with Amazon coupons?

Well, first of all, Amazon charges 60 cents per redeemed coupon, so that can cut into your profits if you aren't careful. And according to Amazon Seller Central, sellers can only offer discounts based on an item's lowest listed price over the last 30 days. And don't forget that Amazon can modify or cancel coupons at any time.

Make sure you've considered how coupons might eat into your profits, especially since there's no guarantee a customer will return to your Amazon Marketplace shop and buy that item again at full price.

Amazon seller coupons are another promotional opportunity for your Amazon store. Understand your profit margins before you begin in order to make the most of them.

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What You Should Know About Creating Amazon Coupons