Early Holidays Boost Amazon Returns: Q4 Advice from Tinuiti and Cahoot
*This is a guest post by Tinuiti partner, Cahoot.
Are you beating your competitors to the punch and winning holiday shoppers in October? Amazon is – they waited all of three days into Q4 before launching their “Black Friday-worthy deals”.
Amazon October Holiday Deals
You can’t just turn deals on and expect to win early – more careful planning will net the most profitable returns. And it’s not just about demand gen either. To take full advantage, you’ll need to align operations with the top of your funnel.
The basic math is simple – selling early isn’t just extra holiday revenue, it’s extra revenue and more profitable revenue.
Early Holiday Ad Strategy
Since most sellers save their best deals and biggest ad spend for Black Friday, Amazon CPC is lower in October and early November. Every click costs less, and it can go further because you’ll have deals running while competitors wait.
Encourage Early Holiday Shopping
Re-learn your holiday ad budgeting – there’s tons of demand in October and November, so if you have a limited budget, shift away from December. Chances are, your outsize returns early in Q4 can drive extra cash flow for more promotions in Black Friday and beyond anyways.
Don’t limit your demand generation approach to advertising, either. Start your holiday deals! Amazon itself launched its Black Friday-esque deals on 10/4 (along with a new tool to easily give gifts to others), so holiday shoppers are flocking to the site. Giving them the deals they crave early will help you stand out and boost your Amazon conversion.
A big, but the underappreciated benefit of this approach is that it will act as a springboard for the final holiday push. You’ll have a lead in search rank heading into the peak weeks, which powers a strong finish. Your early investment extends your selling season, boosts your profitability, and will improve your Turkey 5 to boot.
Overcome FBA Limits with Early Selling
So, you’re convinced – you’re going to sell earlier than ever. But to sell, you of course need inventory ready to go, and Amazon’s limits are squeezing your business and hurting your confidence.
You’ll need a two-pronged approach to overcome this challenge. First, early selling will help you smooth out demand curves and reduce the chance that you’ll be caught off guard when Black Friday hits. If you don’t know already, beware: going out of stock is the single most damaging challenge that FBA sellers face.
Amazon FBA Stockout Cycle
If you boost your performance in October and November, you’ll boost your IPI score, which in turn could positively affect your inventory limits. Then, max out every single one of your limits before the holiday inbound deadlines. Then what: pray you don’t go out of stock?
That’s where the second piece of your strategy comes into play – Amazon FBM. Between massive LTL shipping delays, low inventory limits, and Amazon FBA’s own receiving delays, too much is outside of your control to protect your precious Amazon search rank. Having a second FBM listing for all of your products is a foolproof way to ensure that you’ll never go out of stock – as soon as your FBA inventory gets low, you can switch the FBA listing off and the FBM listing on. This protects your business and keeps you selling during peak.
Want to learn your options and best practices for Amazon FBA? Read all about alternatives to Amazon FBA in Cahoot’s helpful guide.
Beat the Parcel Carrier Crunch
You’ve heard it all – ships anchored off of ports, carriers trying to hire hundreds of thousands of temporary workers, and of course, the dreaded surcharges. “Shippageddon” is coming – early selling will mitigate its worst effects and improve your margin this Q4.
Major carriers take advantage of the rush in holiday demand with surcharges. For instance, FedEx will charge between $1.50 and $3.00 per Ground package from Nov 1 all the way through to Jan 16. USPS is similarly tacking on a variable surcharge based on package size and delivery zone, while UPS is applying surcharges to large items and high-volume shippers.
Any way you cut it, you’ll be paying more this season. But note FedEx’s date ranges. Every sale that you make before Black Friday will cost $1.50 less to get to the customer – how much margin is that for you?
Recap
We hope that we’ve convinced you – your holidays should start the moment the calendar turns over to October. Sellers that take advantage of the surge of customers shopping early will extend their peak season, boosting growth, and they’ll sell during less competitive months, boosting profitability. What’s not to love?
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