In 2019, Amazon generated 87.44 billion dollars in revenue just in Q4. Each year they break their own sales records during the last three months of the year. This year will likely be no different, and potentially even better seeing as though Amazon already surpassed 2019 Q4 sales during COVID-19. During Q2 in 2020 Amazon generated a total net sales of almost 88.91 billion dollars.
7 Strategies to Implement to Prepare for Amazon Q4
eCommerce is continuing to grow substantially with the shift in consumer spending from traditional brick and mortar stores to online retail options like Amazon. While many of the same tactics will still be relevant for Q4 in 2020, there are some unique areas that businesses will need to focus their attention on.
In addition, Prime Day has been delayed and it was recently leaked that it may be coming in October. That means that each month during Q4 will have major sales events: Prime Day (October), Black Friday/Cyber Monday (November), holiday sales (December). It’s time to get ready for Q4!
1. Create a Plan
In order to effectively execute your Q4 sales strategy you need to have a plan, and that doesn’t happen overnight. It’s important to plan early especially this year as we take into consideration longer lead times to acquire merchandise and to ship.
We’ve already seen the effects COVID-19 has had on the global supply chain and we need to keep that in mind. It is highly likely that it will take longer to receive inventory, so by planning ahead you can hopefully help ease the longer than average lead times you will be faced with.
Within the world of Amazon we’ve seen it take significantly longer than usual for Amazon to receive large shipments. Small parcel has been the quickest with it only taking a couple of days. LTL, FTL, FCL all fall in between. We’ve seen floor-loaded FCL waiting at times for over a month to schedule delivery. This is important to note with your planning because if your inventory isn’t available, no one can buy it and you could miss out on Q4 completely.
2. Set Efficiency Protocols
Set up processes to help streamline your entire Amazon business from obtaining products to shipping options. It’s important to be efficient with your time, organized with your inventory and effectively market your products in order to reap the benefits of Q4.
Write it down. Whether you are a pen and paper kind of person or you prefer spreadsheets, write every step down. Sometimes it really helps to work backwards. You know that Prime Day is expected in October so you want to make sure you have inventory in hand, your listings optimized and ready to go as well as any promotions planned (if applicable) before October.
Make sure you take into account the time it takes to get your inventory or to restock it, if you are utilizing Fulfilment by Amazon (FBA). Also, consider how long it takes to get your products sent into an Amazon fulfillment center. Last but not least, don’t forget to factor in time for you or your Amazon consulting team to set up and optimize your product listing as well as your advertising plan.
3. Create an Inventory Management Strategy
Being organized and keeping track of your inventory is a huge part of your business, especially when dealing with delayed shipping times. You have to be strategic to make sure you have the inventory you need ready to go.
If you are utilizing FBA, check your inventory limits. Recently Amazon announced that they will have shipping limitations. Log into your account and go to Inventory > Inventory Planning > Restock Inventory to see how much you are allowed to send in to the Amazon warehouse.
As a backup to your FBA program, consider having FBM (Fulfillment by Merchant) set up and ready to go. That way, if your inventory runs out in an Amazon warehouse or they haven’t received the new inventory you sent in, you can still maintain and fulfill orders utilizing FBM.
4. Determine Your Best Fulfillment Option
How are you going to get your product into your customers hands, and which shipping and fulfillment method is going to give you the quickest shipping time and be the most cost effective for your business?
If you want the coveted Amazon Prime badge, look at Fulfillment by Amazon or FBA. Many consumers look and filter their search results to only include those which ship Amazon Prime. This fulfillment and shipping option can give your sales a considerable advantage.
Fulfillment by Merchant or FBM is another option that many businesses consider, or run along with FBA. Amazon FBM is where the Amazon seller is responsible for fulfilling orders. This option can be managed by the seller directly or by using a third party logistics provider.
Lastly, is Seller Fulfilled Prime. This option gives you the benefit of the coveted Amazon Prime badge as long as you follow the rules. You are in charge of delivering orders directly to customers from your warehouse, and you are committing to fulfill orders within the two-day delivery at no additional charge for Prime members. Amazon does give you access to transportation solutions to help fulfill orders if you use this option.
In order to be efficient and effective you need to plan ahead and you are better off giving yourself a little more time rather than racing to get everything completed at the last minute. Let’s face it, hiccups happen and there are things we don’t have control over (i.e. shipping delays), especially with the current pandemic we are in.
Knowing how much inventory you should have comes with careful planning. Look at your sales data to determine what products have done well during Q4 in the past. This should give you a starting point to be able to estimate how much you need to have stocked. Any lag in inventory gives your competition a leg up.
One of the goals was to acquire the coveted Prime badge. In addition, there were concerns about the FBA product sitting in a warehouse for too long. This was a concern because the shelf life for this product is shorter. Awesome Dynamic tested FBA vs FBM to determine the best course of action for the client. In addition, we worked with the client to ensure that the product was as fresh as possible and not sitting around. By doing the research and testing, we were able to confidently switching to FBA. Within the first month the client saw an increase in sales by 200%! Read more.
5. Start PPC Advertising Early
The shoppers are out there, now you need to make sure they are seeing your products. The goal of any advertising campaign is to increase awareness. Traditionally, without advertising, it could take weeks, months or even years to get your product on page one of Amazon search results. We don’t have that time to waste.
It’s critical to plan ahead (start you campaign early) with advertising and manage your campaign regularly. By doing so you’ll notice trends and be able to track new keywords or unused keywords to better understand your demographic and tailor your campaign to get the best results.
A great advantage to utilizing Amazon PPC (Pay Per Click) advertising is that you’ll only be paying for the clicks you actually get on your ads. There are three fundamental ad types that are available through Amazon PPC:
6. Prepare for Promotions
Promotions are a great way to garner new interest in your products and also give an incentive for the customer to make the purchase. There are three options to consider for Amazon promotions while you are preparing for Q4.
Black Friday and Cyber Monday are known for Lightning Deals. Sellers have to submit their deal by a predetermined deadline set by Amazon. This is not a guaranteed promo opportunity though. Even if you submit a deal, it does not mean your deal will be displayed. Deals with the best price, quantity and inventory are awarded the best time and position on the Amazon Deals page.
If you are looking to move more products, a promotion is an excellent option. They are typically used to offer a multi-unit or tiered discount on your products. This option is also great to use in conjunction with external marketing and advertising campaigns.
Coupons are seen from the search results and are great for driving consumers to your page. There is a fee associated per coupon clipped and used.
7. Stay Focused on Customer Service and Reviews
Q4 is traditionally a busy time of year and provides a good amount of sales for most Amazon sellers. With that in mind, don’t forget that customer service and quality reviews are important for continued success on amazon and your ranking.
Amazon respects and gives advantages to sellers who take their customer service experience seriously. Don’t forget to allocate time to answer buyer questions and respond to customer service queries. Also, allocate some time to focus on ways to get reviews.
That was a lot of information but if you follow these tips you’ll be prepared to benefit from the sales opportunities in quarter 4. If this all a bit overwhelming consider hiring the experts. Our team can help guide you through the planning process leading up to quarter 4 as well as implement our recommendations. Get started today with a free consultation.