Subscribe and Save: Evaluating the Effectiveness of Amazon's Subscription Program

ABSTRACT This study evaluates the effectiveness of Amazon's Subscribe and Save program using panel grocery data from Canada and the United States and fixed effects regressions. Our findings indicate a strong negative correlation between Subscribe and Save eligibility and sales ranks, suggesting that the program significantly enhances grocery sales performance. Specifically, in Canada, grocery products eligible for the subscription program show an average decrease in sales ranks by 2561, which is a reduction of 18%. In the United States, eligible grocery products experience an average decrease of 5021 in sales ranks, corresponding to a 19% reduction. When we analyze these correlations by seller type, it becomes evident that third‐party merchants benefit more from the subscription program than Amazon itself. Therefore, we conclude that the Subscribe and Save program is crucial for the success of third‐party agribusinesses operating on Amazon's marketplaces.