Christmas, to no-one’s surprise, is often the busiest time of year for any retailer – whether on or offline. For Amazon sellers, it can be the key to success or failure of your business in any given year. Here in the UK, online sales over the Christmas period are formidable: in 2016 alone, internet shopping in December rose by 19%.
As a result, Amazon ‘gate’ certain categories, most notably ‘Toys and Games’ between November and January each year to ensure that none of their customers end up with lumps of coal shipped by unscrupulous or underprepared sellers. Do not let the Amazon suspension Grinch steal your Christmas away either by following our seller’s guide to not just surviving but thriving during the busy end of year season.
Step 1 – Seller performance hurdles?
First barrier to selling within ‘Toys and Games’ on Amazon.com, for example – when was your first sale? Pre-15th Sept 2017 and you’ve made it. Any later and you’ll have to sit it out until next year. Also, you must have made at least 25 sales within September and October to make the cut. Each category and marketplace will have different deadlines and criteria, so best to check on the respective Amazon marketplace.
Step 2 – FBA warehouse storage costs mount up in Q4
Fulfilment by Amazon (FBA) is the preferred method of shipping for many of Amazon’s customers, particularly given that it is a key selling point of Amazon’s Prime service, and it carries a lot of weight in driving sales when you consider that approximately 64% of US households have a Prime subscription.
Aside from Amazon’s Long-Term Storage fees kicking in on 15th February and 15th August each year for products that have sat unsold for 6-12 months or more (so always schedule an inventory clean up before those dates!), monthly storage fees apply for items that have yet to be sold or shipped via FBA. These vary according to size and weight but there is one common theme – it gets exponentially more expensive on a monthly basis to store products at Amazon’s warehouses from October to December each year. As a result, it only really makes sense (with one exception) to use FBA for SKUs you know are going to sell quickly during those months and supplement this with seller-fulfilled shipping for the remainder of your inventory.
The exception to the above would be if you did not have capacity to fulfil orders yourself and that each marginal slower-moving product sold via FBA was realising a profit even after the increased FBA storage rates. Just make sure to have a clear out of inventory left with FBA before the start of February the next year!
Step 3 – To FBA or FBM – that is the question…
If you use FBA, bear in mind that Amazon publishes updated target dates every year, by which point Amazon need to have received inventory in order for you to sell on Black Friday, Cyber Monday and during the Christmas period.
There are no such restrictions for Fulfilled By Merchant (FBM), where you or another 3rd party company ship products directly to customers. However, given the seasonally busy period for domestic and international postal services and shipping carriers, best to still plan ahead when it comes to warehousing and shipping times. This could involve updating your listings to extend the stated shipping time (to manage customer expectations and avoid complaints) or offering additional priority shipping options to consumers in the run-up to the big days. Opting for enhanced tracking of packages – either at your own cost or rolled into the product/shipping costs – can also save you the ire (and bad feedback) of unhappy customers.
Step 4 – Stay in Stock
Once you are up and running heading into the crunch period, the trick is to keep stock running high across your most popular SKUs. Keep relationships with your key suppliers in rude health with prompt invoice payments and make sure the dreaded ‘Out of stock’ message never graces your Amazon listings or your storefronts. Prior to the holiday rush, do your product research well ahead of time, reflecting on what sold well the previous year but also what your competitors sold a lot of. There are a lot of very good product analysis sites and services available that even display historic prices and stock levels across Amazon products. Although potentially an extra expense to start with, it is often nowhere near as expensive as lost sales.
Step 5 – New Year Returns and Refunds
At the end of December, you log into Amazon Seller Central, check the hockey-stick spikes of sales over the holidays and reflect on a job well done… almost. As with every 100 sales you have made, there is potential for customers to return 5 to 15 of those purchases. It is part of the natural ebb and flow of online sales but it is especially important before periods of increased activity to check that your returns and refunds process is robust enough to cope under the strain. If you are using FBA, you should be safe from the impact of bad seller reviews (as Amazon take responsibility for the fulfilment experience and will strike them out upon request) but if not, make sure that your in-country returns solution is up to the task.
There are a number of third party providers that specialise in in-country re-fulfilment, which involve storing returns in local warehouses and repackaging those products before sending them out to fulfil new orders within that country, saving the costs of international repatriation.
Whilst that will not suit sellers of all sizes, Amazon has already taken it upon themselves to volunteer free customer returns to FBM sellers, paid for by the seller of course. In such instances, it may make more financial sense, no matter how counterintuitive it is, to issue a refund and ask the customer not to send the products back. At the very least, it should preserve your seller rating to battle on until the following year’s holiday season!
Simply give your account manager a call to discuss how we can help on +44 (0)2078011068, email email@example.com or, if you’re interested in using WorldFirst, visit www.worldfirst.com/uk/online-sellers to get started.