Originally published on October 28, 2016, updated June 23, 2020
Q4 has arrived…….now what?!
There is a lot of hype about Q4 in retail and so there should be. After all, as an Amazon seller this is your opportunity to maximize your sales for the year with the chance to see your sales double, triple or even quadruple.
For those who are new to retail selling, the term Q4 may not mean much to you. For those that have experienced Q4 in the past, now you can understand why there is all this excitement. Having a successful fourth quarter means that your hands need to be on the wheel at all times!
Q4 covers the holiday season starting in October through December. You may have already seen the seasonal displays and toys stacked up on shelves in your local supermarket as a gentle reminder. The same process is happening online. Sellers have dramatically increased their inventory and online retailers will soon be merchandising their holiday season and gifting campaigns.
Although Q4 includes the month of October, you will typically begin to see true influx of sales when November arrives. Sales will continue to grow up until the last shipping date before December 25th, Christmas Day. Relying on quick dispatch times and expedited shipping, more and more customers will leave buying gifts to the last minute.
The level of sales uplift is dependent on a number of factors, such as: product category, pricing, inventory, quality of content, reviews and discoverability. You will see a greater sales increase on gifting items such as toys, perfume and electronics than you will see on all-year-round products such as household supplies and everyday essentials. However, you’ll be amazed by what people purchase as a stocking filler!
So what should you be doing now that Q4 has arrived? Is it business as usual or should you be operating differently? To help answer those questions, I have compiled the following Amazon selling tips:
You must have sufficient stock to support the anticipated sales uplift. Forecasting is already a challenge, even more so if this is your first year as a seller. You want to avoid the dreaded out of stock during Q4 as well as overstock come January. The more information you can get from industry specialists such as manufacturers, sellers and retailers, the better your forecasts. Don’t be afraid to ask!
Private label sellers who are importing products should have stock about to hit the dock or that has already arrived. A delay in receiving inventory means less time to sell through the stock. For resellers sourcing goods nationally, get your orders in quick. Understand the availability of key lines from manufacturers and distributors. If possible, ring fence or set aside assets for stock as opposed to buying it all upfront, as this will help your cash flow.
Are you fulfilling sales yourself, through the FBA program, or a mix of the two? FBA storage fees increase dramatically in Q4. Think carefully about your FBA stock levels; too much stock sitting in the Fulfillment Center collecting dust will cost you. The level of stock should depend on how quick and how frequently you can send in shipments, although you should allow extra time.
Winter weather conditions can delay shipments and the Fulfillment Center gets busy, so there may be a backlog in receiving shipments. Be prepared to react, since demand could suddenly peak higher than you had ever imagined. If you are short on time to restock, Seller Fulfilled will be your option. If you qualify, the Seller Fulfilled Prime program is now an option as well.
A pricing strategy is a must, whether you are a retailer selling branded goods or you're selling private label products. You want to be competitive, sell through your Q4 inventory and still make a profit.
For private labels with no direct competition on your listing, don’t sell too low at the start. This is your time to maximize your profit before prices start falling. Save the price drops for Black Friday and for when pricing gets aggressive among the competition. Set inventory targets by certain dates; if you are then sitting on surplus stock once you hit that date you may need to consider dropping your price. You don’t want the stock sitting there in the first quarter of the new year.
For resellers competing with multiple sellers, consider using automated pricing tools. Manual price checks and changes will become impossible during Q4. Prices may change by the second when you are fast asleep. While you want to be aggressive enough to win the Buy Box, you still need to make a profit. Decide on your minimum profit margins. If there is too much competition on your listings and you cannot compete without making a loss, consider selling the items in packs. There might be less competition on 2 packs and 3 packs and by shipping items together you may have room to be more aggressive on price.
Optimize your product pages and check to make sure all information is 100% accurate. The last thing you want is a negative review or customer complaint because your content or images were incorrect or misleading. Keep your titles customer-friendly, including all relevant information. Avoid keyword stuffing; instead use your organic keywords.
The bullets and descriptions need to be customer-facing. Put yourself in the customer's shoes. What would you want to know about the product prior to making a purchase? High-quality images are a must and the more the better. Since customers cannot touch the item, give them a 360 degree-view and lifestyle shots so they can see the item in use. Remember your content and images must adhere to Amazon policies - go against them and you could find your listing closed overnight!
Amazon is even less tolerant than usual when sellers are not hitting their performance metrics targets during Q4. They are quick to suspend accounts, with very little warning. Make sure you are keeping track of your seller performance metrics. This is easier to manage if you sell through the FBA program with Amazon fulfilling the orders and managing the customer service and returns. For Seller Fulfilled listings, ship orders within the ship by dates stated on the order and include a tracking number on all packages. If 1-2 days dispatch is not possible, extend the dispatch time to guarantee no late shipments. Keep your inventory up-to-date and do not oversell. Respond to all buyer messages and product returns within 24 hours. Most importantly, offer excellent customer service and avoid those lethal A-to-z claims as well as negative feedback. You want positive feedback and loyal customers!
An increase in sales means an increase in seller feedback and product reviews. Even if the item is a gift, customers still like to test and review the product. Negative feedback and product reviews can appear quickly. Be sure to manage these immediately since you don’t want these to impact your sales.
For negative feedback, respond to the customer and resolve the issue fast. While you cannot incentivize them to remove their feedback, you can offer excellent customer service so they naturally feel the need to change their rating. For product reviews, you can comment on the review to show that you care and that you're paying attention to what customers have to say about your product. Also, if the review is incorrect or unfair, it's your chance to politely correct them.
During Q4 the playing field becomes a lot more competitive. Sellers up their bids, increase their budgets and are checking campaigns daily. They will not sleep knowing that their items are not appearing on the first page of the search results. You as a seller need to be doing the same: Up your bid, increase your daily spend and, while you need to sleep, make sure you keep a close eye on the performance of your campaigns. The cost-per-click that was tracking at $0.60 last month may have just doubled. Remember for manual campaigns to help you get the bid right, change the settings of your campaign to Bid+, this will raise your bids in that specific campaign by up to 50% more than your default bid. Also keep an eye on the search-term report, as a popular new keyword may have just evolved. For those running both automatic and manual campaigns, continue to harvest and don’t forget to apply negative keywords on irrelevant terms that are costing you money.
Don’t lay all your eggs in one basket. Your business is at risk if you are 100% reliant on the Amazon marketplace. There are more channels and retailers out there with third-party platforms. If Amazon suspends your account during Q4, what is your backup plan?
Lastly, expect the unexpected, be flexible and keep your eye on the ball at all times. Happy Q4 selling!
Originally published on October 28, 2016, updated June 23, 2020
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.