When will too many lightning deals scorch performance? Operational perspectives from Amazon's product sales

: While prior research on flash sales has primarily examined inventory behavior and promotional effectiveness through consumer behavior perspectives in laboratory settings, this study investigates Lightning Deal participation effects on product sales rank from sellers' operational perspectives using observational data from Amazon.com. Specifically, it examines how product characteristics and promotional frequency influence the effectiveness of Lightning Deals. Using a panel dataset of Amazon products, we estimate logit and fixed effects panel models to analyze how product attributes and promotional strategies affect sales outcomes. We also incorporate moderation and quadratic analysis to explore diminishing returns and advertising saturation points. We find that product characteristics (e.g., product age, weight, and size) along with product quality measures (e.g., rating and number of reviews) significantly influence the likelihood of Lightning Deal participation. Our main results suggest that participation in Lightning Deals significantly improves product sales rank. However, this effect is short-lived, with sales gains diminishing once the promotion ends. Furthermore, repeated exposure to Lightning Deals reduces the perceived urgency created by scarcity signals, contributing to a saturation point effect. Surprisingly, a U-shaped relation between deal frequency and sales rank is observed, with the turning point occurring after approximately 11 deals during a five-month observation period. This study offers novel empirical evidence of diminishing effects in recurring flash sales within the context of e-commerce promotions. It offers actionable insights for sellers regarding optimizing promotional frequency and tailoring Lightning Deal strategies based on product life cycle and inventory characteristics.