For Amazon sellers, Q4 is the most profitable quarter. The e-commerce explosion has been intensified by the accelerated movement of shoppers from using traditional brick-and-mortar stores to shopping online in the wake of the global health crisis.
Although many countries are returning to “normal,” the shift in shopper behavior continues, leaving many speculating that Q4 2021 could be the biggest yet. The shift towards e-commerce is evident in the recent Prime Day stats presented by Adobe Analytics which showed a 6.1% increase in sales compared to last year, surpassing $11 Billion in profits.
Despite its clear importance, many sellers still ask, “How do I prepare for Amazon Q4?”
To help you capitalize on the enormous selling potential this Q4, here is a list of the top 6 hints and tips gathered from industry experts:
1. Be Aware of Logistics Delays
No matter how you sell your products, the fact remains, logistics during Q4 is a nightmare. Unfortunately, these usual delays and backlogs have worsened with Covid-19 and the global shipping crisis.
Leading up to Q4, It is advisable to build expected delays and added buffer zones into your calculations when deciding when to order stock next.
You may have even already noticed limitations and preventative measures as logistics companies try to build capacity for the Q4rush. To avoid this, some top experts suggest ensuring all stock has been ordered and is on its way by the latest mid-October. By ordering early, you can hopefully miss the bulk of delays and keep your stock limits as steady as they can be.
Another logistical issue to consider is getting your stock into the Amazon warehouses. While hold-ups at this step in the process plague all sellers, warehouse delays are particularly costly to those selling internationally via FBA. Adding long lead and clearance times can have a severe effect on your IPI and inventory levels. As such, these two things will need particular attention during this busy time. To avoid this scenario, you should check courier holiday deadlines and ensure you use the best person for the job.
Not all couriers are born equal, and effectiveness may differ from country to country, with the best USA option potentially resulting in long delays when used in Europe. Zee has spent significant resources researching and testing couriers in all our destinations. Speak to us for advice and assistance with all your international shipping needs.
2. Beware the Shiny Object
Now is also not the time to fall for shiny object syndrome. While some recommend researching the new hip thing to sell, many Amazon experts stress that you should keep your latest big idea until Q1.
New products are challenging to set up at the best of times. You do not want to be caught with a poorly ranking product or your account being suspended because you rushed in a new product.
Instead, do some research on which products sold well previously and use this as a way to predict which products you should focus your attention on for this year. Apps like Sellerboard, Helium10, and JungleScout can help you track these trends.
3. Investigate your Compliance in Advance
The last thing you want during the Q4 crush is a stuck shipment damaging your IPI score and causing delays for your buyers.
Compliance requirements can be highly complicated, and subtle changes are common. Certain countries, such as Germany, also restrict popular holiday season items like children’s toys.
Make sure you understand what is needed for your shipment. Having your compliance at the ready can have a marked effect on the speed and success of your international delivery, and having the right partner can also make this process a lot simpler.
4. Manage Your Inventory
You cannot speak about logistics delays or Q4 for that matter without mentioning the need for proper inventory management.
Inventory will be a pain point for everyone this season after Amazon introduced its unpredictable stock limits. These, on top of factory and logistics delays, are bound to keep sellers around the world up at night!
The key to ensuring you have enough stock is making sure you have inventory ready to go early. Doing so gives you a buffer zone to avoid unexpected delays and the dreaded “out of stock” watermark during this crucial time.
Upping your inventory management game is especially important for FBA sellers, particularly that selling in international markets where restocking is complicated.
You need to make sure you have just the right amount of inventory. Too much, and you will lose money on storage costs with warehouse space priced at a premium during this time, too little, and you miss out on a huge income opportunity.
Although the exact percentage varies, most sellers see a 30-50% rise in sales during Q4 making this an excellent place to start your planning.
5. Use More Than One Selling Method
Dan Meador, a co-founder of The Wholesale Formula, shared this invaluable piece of advice during a recent interview. In this interview, he discussed problems faced by all e-commerce sellers, including stock limits and good inventory management.
Following in the same vein as the general logistics delays which sellers face during this time. Meador discussed the uncertainties FBA sellers encounter when a backlog inevitably develops, orders are delayed, and problems in restocking at warehouses arise.
What Meador suggests is running concurrent offers, some FBA and some FBM. Both allow for an alternate channel to ship through, which is a massive benefit for those looking to capitalize on Q4 sales.
Selling via more than one channel gives you an alternate option if delivery into the Amazon warehouse is delayed, as shipping FBM means you can hold a lot more inventory.
However, shipping FBM is complex and involves many moving parts, especially when conducting sales in a country other than your own. To be successful, you need to establish good relationships or at least make some connections with prep centers or third-party logistics companies before the start of the Q4 rush.
6. Remove the Blinkers
Finally, be sure not to fall into the trap of putting on Q4blinkers. Remember, life and selling goes on after the holiday period. Being caught off guard in Q1 can be just as troublesome as mistakes during Q4.
This is particularly true for the vast number of sellers who rely on Chinese factories for their products. While most Western World settles back into normality in the early months of the year, China is gearing up for its longest holiday, Chinese New Year.
This holiday usually falls between late January and mid-February, and the resulting disruptions can last up to 40 days. This means orders from this region which typically take 60 days to fill, could take over100 days, leaving you with a potential stock crisis.
To avoid this, try to get your Q1 orders in before the rush begins. Some recommend you place orders as early as October. All agree, however, that orders must be in by late November at the latest.
A trick to cutting down your lead times is to give your supplier a forecast of your anticipated stock needs. For example, if you order10 000 units every two months, that means approximately 60 000 units over the year.
Ask your supplier to order enough raw materials for your yearly needs at one time. That way, they will have everything in stock and minimalize delays when you place an order.
Understandably, however, this is not always an option for smaller players and requires significant repour between seller and supplier.
No matter how you choose to tackle the Q4 madness, one thing is for sure; preparation is key. As this Q4 creeps nearer, we hope you can find some comfort in these six Q4 2021 hints to maximize your Q4 earnings!