What You Should Know for Amazon Peak Season 2021

Webinar Recap

Are you ready for peak season? Even if you’re already planning, it’s never too early to improve your strategy. You never know what fourth quarter challenges you may face, especially during a pandemic, so it’s always best to be prepared!

For this engaging webinar hosted by Colleen Quattlebaum, we partnered with industry experts Eli Engelberg from Seller Snap and Stephen Bullard from Project Verte to share how to take advantage of this busy selling period. Before you settle in to watch, here’s a quick recap of what to expect!

Repricing Strategies for Q4

It’s not your imagination. Competition during Q4 is especially fierce. “The same things happen — sellers come in and leave, sellers run out of stock — but the frequency of this happening is just much higher,” said Engelberg. “You’ll see changes within days. Something you’ve been selling well might completely change in a matter of a day or two.” A simple repricing rule might do the trick at any other time of year, but during Q4 it's important to have an automated solution.

Why? As Engelberg explained, you need to respond quickly — but appropriately. If you’re competing against FBA sellers that go into backorder, knowing when to reprice will give you an advantage if you have fulfillable stock. At the same time, you don’t want to be too aggressive, especially when competing against new sellers who may have priced their items too low. The right tool can help you maximize your profit while keeping a reasonable Buy Box share.

Overcoming Inventory Restrictions

In the fourth quarter, sales typically increase but sellers run into replenishment and inventory cap issues. What can sellers do to avoid running out of stock? One strategy is to have two listings — an FBA listing and an FBM listing as a backup. Both can be active but it’s important to prioritize.

“As long as your FBA listing is fulfillable and competitive, that’s the one you should try to get Buy Box share with,” Engelberg noted. “When it becomes back-ordered or out of stock, the FBM listing gets priority and will start repricing competitively until you’re able to replenish in Amazon.” You could also reprice to slow down sales so that you continue making money without running out of stock.

Benefits to Using a Fulfillment Network

You can support FBA while creating value with the same inventory in other demand channels by leveraging an independent third-party network. It can be advantageous to leverage your inventory across multiple channels out of a single facility or distribution network.

“The idea is that you can bring your same inventory that’s being gated by Amazon, while it’s sitting there being prepped to be sent to Amazon to support FBA,” explained Bullard. “It could be used for FBM...or it can be opened up to other demand channels out there including Walmart, Target, and Shopify.” You can generate more sales by leveraging that same inventory.

Forecasting for Q1

There are a lot of seasonality changes between Q4 and the following first quarter, which can make forecasting for Q1 a challenge. Even though things are busy during peak season, Bullard stressed that you can’t wait until it’s over to start planning for the next selling period. You need to have a plan.

Selling in a post-COVID world has made forecasting more complicated. “Historically, I know that we’ve all looked at fourth quarter and get singularly focused on getting through peak. The reality is that in the new retail environment...there are new peaks that we’re seeing across the board. The days of getting through fourth and then looking at first are over,” he said.

Get Ready for Q1 Now

We’ve barely scratched the surface with this brief recap, so you definitely don’t want to miss the full webinar experience! The pandemic has changed the online marketplace, and successful sellers understand the need to adapt. It's important to find the right balance, but being prepared can help you survive the waves of uncertainty that we've all seen in the supply chain.

This short webinar can provide the insight and guidance you need to get ready for Q1. Things are more competitive than ever, so there’s no time to wait. Plus, stick around to hear how they answered some great questions from other sellers.

Colleen: All right. Welcome, everybody. Thanks so much for joining us today for our webinar on What You Should Know for Amazon Peak Season.

Colleen: So, as you know, we're well into Q4, and it is peak season on Amazon for sellers with the holidays upon us. There are a lot of supply chain challenges and issues that sellers are well aware of, but consumers are also well aware of these issues as well, so many of them have hopped on their holiday shopping early. While it's only mid-October, there's definitely a lot of revenue and items being sold on Amazon.

Colleen: The competition is fierce, as always in fourth quarter, but even more than ever. I'm excited to have two of the industry experts joining us today to help to guide us through some of these fourth quarter challenges and give us some tips to help you all be more successful in fourth quarter.

Colleen: So, from Seller Snap, I have Eli Engelberg, who is the CEO and co-founder of Seller Snap. Hello, Eli, thanks so much for joining. And from Verte, we have Stephen Bullard, who's the Senior VP of Operations there. Thanks for joining, Stephen. Good.

Colleen: Today, just a couple of things that we'll cover. You probably saw this in the email or the registration page when you registered. But, the things that we're going to talk about today are repricing strategies for Q4. Seller Snap, they are experts on repricing.

Colleen: We're going to talk about how to overcome inventory restrictions, what to do with that excess inventory that does not sell. Hopefully, you're not in that situation, but we know it often happens.

Colleen: And, what the benefits are to using a fulfillment network where we'll talk about strategies to maintaining a high IPI score because we know how important that is. That is crucial to your success on Amazon to reduce those storage fees. We will also talk about return and reimbursement analytics. Then, looking ahead to first quarter. It can be challenging to forecast with all the seasonality changes from Q4, so we will touch on that as well.

Colleen: I'm going to go ahead and close my slide deck here so that we can just talk as a team here. Let's kick it off with Eli. I think you're on mute, Eli, so just make sure to unmute here. Let's talk about how fourth quarter, the market is competitive as always, but it's even more important this quarter to have a strong and smart repricing strategy in place due to the changing conditions. What are some of the challenges that fourth quarter brings to Amazon sellers when it comes to repricing?

Eli: Well, again, judging on the previous years, it seems like during Q4, the competition is as if it's put on steroids. So, the same things happens, sellers come in and leave. There's sellers that run out of stock, but the frequency of which this happens is just much higher. You'll see changes within days, and something that you've been competitive on and been selling well, might completely change in a matter of a day or two.

Eli: Whereas maybe the rest of the year, you can get by with a simple repricing rule, it becomes, I think, more critical to have a good, automated solution to keep track of everything. Because, just for example, you might be competing against FBA sellers that go into backorder, which we know makes them far less likely to win the Buy Box.

Eli: Obviously, you're at an advantage if you have a fulfillable stock. So, you want to price against such a seller differently than you would against another FBA seller who is comparable. Again, like I said, because a lot of times you see new sellers come in and sellers sell out, there's two different things to consider here.

Eli: First of all, you want to be quick. You want your repricer to be quick to react if a competitor is out of the market. So, maybe having a competitor drove prices down a little bit, but the second they are no longer have a fulfillable quantity, you can make a bit more profit.

Eli: The other side of that is you don't necessarily want to react too quickly when a new seller comes in because what will happen a lot of times is a seller has just listed the product and might test it at a price that's too low. Typically, what our automatic repricer does that I would recommend anyone to do anyway is not to adjust too quickly to a new seller. So, if everyone's selling something for $20, and someone comes in at $17, it doesn't make sense to immediately jump down to be competitive. It's good to give a day or so to see if the guy comes to his senses and aligns with what was previously the accepted price.

Eli: But, other than that, I think the same general rules still apply, which is you want to try to maximize your profit while keeping a reasonable Buy Box share . So, you don't necessarily want to become too aggressive because, again, the chance of price wars also increases. You want to keep, again, the same strategies applied, but you want to be a lot more on top of things.

Colleen: OK, good. Obviously, in fourth quarter, sales typically increase, but sellers run into those replenishment issues, inventory cap issues, Amazon restrictions. From a repricing perspective, what can sellers do to avoid running out of stock?

Eli: Well, there's two things. The first is general strategy that I think most of our customers that do FBA have is at all the times, they'll have two listings, so they'll have an FBA listing and FBM listing as back up. They can both be active.

Eli: What our AI repricer would do is prioritize. So, as long as your FBA listing is fulfillable and competitive, that is the one you're pushing and trying to get Buy Box share with. But, in the instance that immediately either becomes back-ordered or is out of stock, you have this backup, so the FBM listing gets the priority and will start repricing competitively until you're able to replenish in Amazon. That's, again, assuming that you have your inventory and warehouse.

Eli: Another thing that you would do regardless is you can apply repricing conditions. This applies generally to different things. What it means is you set a condition, and, if that condition is fulfilled, the repricer will change its repricing method.

Eli: So, you can say, "Okay, you're trying to win the Buy Box at a certain percentage," but you could say, "Okay, if my fulfillable quantity drops below a certain threshold, I want to be less aggressive or I'm going to increase price. I'm going to set my price maybe based on it being the lowest FBA seller or something like that." The result would be probably I'm going to slow down my sales a little bit, maybe make a little bit more money, but not run out of stock.

Colleen: Okay. Well, yeah. Obviously, running out of stock, aging inventory, there's a lot of things that go into IPI score as well. This year, especially, high IPI scores have been a necessity for sellers who require the high page rankings and a significant Buy Box share in order to increase sales, but that aging inventory has a negative effect on those scores.

Colleen: So, what tips do you have or what strategies can sellers use to make sure that inventory age doesn't impact their IPI score?

Eli: Well, that's, I think, the opposite side of the coin of what we just discussed of running out of stock.

Colleen: Right.

Eli: First of all, data is important. Again, it's important. What we try to do is provide as much inventory relevant data, not just your velocity and your inventory value and such, but the breakdown that Amazon provide of inventory age based on groups. I think they go 0 to 108, 0 to 90, 90 to 180 or something like that, that they have it grouped.

Eli: Then, again as I mentioned before, you can set a condition. So, you could say, "Okay, if I have more than X items that are older than, let's say, 270 days or 90 days," or it doesn't matter, "I'm going to change my repricing method to be more aggressive."

Eli: I might say, "Target the Buy Box," where, in general, the AI repricer is never going to aim for 100% Buy Box if there's competition to avoid price wars. But, you could overrules that and say, "I want to win 100% Buy Box and just become aggressive."

Eli: You can combine that with some other things to try and increase the price every now and then. You could tell the repricer to jump up in price every X hours, again, to try to pull the market up. You would also want to monitor the competition and your minimum prices, again, if you're trying to get rid of inventory to make sure that you're not stuck because of the minimum price threshold that you have.

Eli: Again, we're talking general business decisions that you need to make. How eager are you to get rid of something? How much are you willing to sell for? That can definitely be done, so you can control how aggressive you are.

Colleen: Okay. Yeah. There's a program that Amazon has, the FBA Liquidations Program. So, if you've exhausted all other avenues, and you're getting to the end of Q4, especially if you have seasonal items that just won't sell at the beginning of next year, you could look into the FBA Liquidations Program, and that's where sellers can try to recover some value from that excess inventory and customer-returned items.

Colleen: So, rather than your inventory just being disposed of or returned to you, Amazon will send it to wholesale liquidators instead. The recovery is typically only about 5 to 10% of an item's average selling price, so, again, it's a business decision that you need to consider.

Colleen: To liquidate your inventory, you simply just create a removal order and select the liquidations option. There are some fees that are incurred. But, if you're struggling with having a high IPI score, then this is something that you'll definitely want to consider because FBA sell-through rate is a crucial component of your Amazon IPI score. That excess inventory will bring down your score.

Colleen: So, if you choose to submit a removal order through the FBA Liquidations, your IPI score won't be influenced while the inventory is pending removal. But, once the inventory is liquidated or removed, then your sell through rate should improve because that excess inventory has been reduced. That, of course, improved sell-through rate leads to a better IPI score. So, even though you might not make as much revenue, only 5 to 10% of the selling price, if it's going to help your IPI score, it might help in the long run.

Eli: I think what you said just completes the argument that, especially now, you need to be on top of the data and see what's going on. Because, obviously, as you said, it's worse to, in the beginning, when you still have chance of selling, it's better to sell maybe a 50% discount. You're still going to make more money than than going to FBA Liquidation. So, have that step in as a last resort, as you said. If I've exhausted all other options and I'm stuck with it. Yeah.

Colleen: Right, right. And, you might even want to experiment with creating kits or bundles as another way to handle access inventory. So, if you have some common products that people tend to purchase together, or maybe that you might suggest that people purchase together, then creating that kit or bundle can be another way to get rid of that inventory. Our inventory management tool, Restock Pro, can help with that as well.

Colleen: So, before you even consider liquidating excess inventory, if they've purchased a significant amount of inventory, and they've predicted the higher velocity, are there any other repricing strategies or anything else for fourth quarter that you want to mention that they should consider when it comes to repricing?

Eli: Well, again, I think there's always all sorts of specific cases that we could go into. I think, in general, as you said, it's between two fronts, it's either us having the good problem of selling out, selling a lot, but then getting stuck without inventory or having inventory that's not moving fast enough. Really, there is a limit what you can do in selling because, again, in the end, it's influenced by demand. So, in some cases, even if you're super aggressive, you're not going to move it if there's no demand for the item.

Eli: Again, I would say make adjustments, if necessarily, more frequently. Check the data, check your numbers and see what's going on. See what's going on with the velocity, see what's going on with the competition. Is it something where you had three competitors and now all of a sudden there's seven, eight? All these things can maybe help you be preemptive and know in advance that something's going to get stuck and act accordingly.

Colleen: Okay. If somebody does not have a pricing tool in place or a good pricing strategy right now, how quickly can they get set up with Seller Snap knowing that we're already into fourth quarter? What would you suggest? How long is that timing to get set up using your tool?

Eli: Yeah, set up is very fast. I think it takes I would say up to one hour to pull in. Really, the only... not challenge, but the only thing that takes time is to pull in the data from Amazon. Once you authorize us or any third-party solution, when you grant access to your Amazon account. I'm sure you guys all know this, you pull in data. I think it would take about an hour to have all your listings, everything, and historical sales for the past 30 days which is a good benchmark when you start to see what your numbers are.

Eli: Then, really set up depends on, again, hoping that you're organized and that you know your costs and have some idea of what your margins should be and what your minimum price to be. It can be done in a few minutes because all the automation is there. Fees are being pulled in automatically. Again, if you upload your costs or have them pulled in from an inventory management system, the repricer is good to go immediately.

Eli: But, then again, I think it's more familiarizing yourself with the different data points that then allow you to evaluate and also make adjustments if necessary. So, you get started, and then you say, "Okay, let's look a day, two days, seven days into it and see where it's going."

Eli: And, also, find the pain points because you might find, "Yes, my price is too high because I have 100 units in stock, and my minimum price is $20 and yet it's selling for 15 on Amazon. If I just stay there, it's not going to happen." So, make the adjustment immediately and don't just sit there and later on figure out, "Oh, I was not competitive and I wasn't selling."

Colleen: Okay. Very good. So, there's still plenty of time to get set up-

Eli: There is, definitely.

Colleen: ... for the fourth quarter and make an impact. Good. Good. All right.

Colleen: Well, switching gears a little bit, I want to talk with Stephen. I have some questions for you. Stephen, how can a retailer support FBA while creating value with the same inventory and other demand channels? So, in other words, can they have their cake and eat it, too?

Stephen: Yeah, they sure can. They can do that by leveraging an independent third-party network outside of Amazon. So, we talked about omnichannel, and here at Project Verte, we include FBA in that argument now. You have your D to C, your retail wholesale store replenishment, and we actually talk about FBA prepping, really the fourth component of omnichannel. What that means is leveraging your inventory across all of those channels out of a single facility or single distribution network that can support all of those equally.

Stephen: The idea is that you can bring your same inventory that you're bringing in that's being gated by Amazon. While it's sitting there being weighted to be prepped or sent to Amazon to support FBA, that same inventory could be used for FBM, if you qualify, or it could be opened up to other demand channels so that you can actually sell it, that same exact inventory to other demand channels out there, so your Walmarts, your Targets, your Shoptifies.

Colleen: Okay, great. I know Project Verte helps manage Amazon sellers and aggregators, businesses. You have many, many clients, so you're aware of all of the challengers these sellers face today. How can Amazon sellers overcome the inventory restrictions?

Stephen: Yeah. The best way to overcome the inventory restrictions with Amazon is to support what Amazon's asking. So, you can still bring your product in, you just need to have another source to be able to have that inventory ready so that as Amazon indicates to you, "Here's how much product you're allowed to bring in. Here's how often you can bring it in," that inventory can be brought in en masse. It can be staged in a single facility. That prep work can be done to support the FBA prep work.

Stephen: But, again, going back to what I was talking about, that inventory can be leveraged for other demand channels. So, that inventory is not statically sitting there, not being supported by FBA, it can actually be supported to other demand channels, so you can still generate sales from that same inventory.

Colleen: Okay. You mentioned FBA prep, but can you explain a little bit more specifically? How does a 3PL help with that FBA prep, especially when it comes to preparing for the holiday season?

Stephen: Yeah. Specifically when I talk about FBA prep, what I'm talking about is that any true wholesale environment, which FBA prep... I mean, FBA fulfillment by Amazon is, there's very specific requirements about what that product needs to look like when it's shipped into an Amazon distribution center. So, FBA prep means that you are taking product that potentially is coming from overseas or OEMs that you haven't seen or you don't know exactly what it looks like, and we go through that product, we make sure it's the right product, the counts are right.

Stephen: It's then configured. It's built correctly, it's labeled correctly, meeting all the FBA requirements. Then, that product, as it's shipped into the Amazon distribution network, it matches all the requirements. And, that's more important really than even your typical retail compliance because in a typical retail compliance environment, there will be fines that you deal with if you're not meeting those retail compliance. But, with Amazon, it could actually impact your sales, your status, your actual ability to sell online, so it becomes really critical that you have a partner that understands all the requirements to actually be able to do that FBA prep work that's shipping in there.

Colleen: If I'm a seller and I'm considering moving from my own fulfillment center to a 3PL, what are some things that I should be looking for to make sure that I choose a good 3PL company?

Stephen: Yeah, yeah. To me, it breaks down into six or seven really key things that you should, really, when you're sourcing a 3PL to support your business, especially if you're a digital native or you grew up in the FBA network, that first initial outsourcing, you need to understand that Amazon does things really well, and they make things invisible to you that, once you go outside that Amazon network, that you'll need to be able to support.

Stephen: First thing is you want to make sure that the 3PL partner you're talking to has the technology to truly support the things that you need, is that demand channel connectivity, unit of measure is very important, that they really built to do an omnichannel fulfillment from a technology standpoint, that they have the technology stack to support that. The other thing is experience. Definitely make sure that you go kick the tires, make sure that 3PL partner has experience in doing D to C, that they have experience doing wholesale retail compliance and actually supporting FBA prep work. Then, this is redundant, but they have that really true omnichannel capabilities. Make sure that they absolutely have the capability, the experience, the processes, and the technology to support omnichannel.

Stephen: What's really important, too, the last two from my perspective is understand their pricing and terms. The biggest heartburn I think everybody has when they first go out to a third party is what they price versus what they get invoiced. They have a disconnect. It's hard to audit or understand what they're really paying for. So, when you do, make sure that you understand what that 3PL is pricing and make them do a proforma. Make sure that you have a sample set that you can compare apples to apples and that you understand what that pricing versus invoicing is going to look like.

Stephen: The last thing is scalability. That's probably as you grow, make sure that the 3PL you're picking can scale with you, not only in the facility that if you start with a single-source facility, make sure that they can grow, not only regionally but nationally with you.

Colleen: Yeah. I think finding somebody that meets all those components is important because hiring a fulfillment network or using a fulfillment network can really impact your customer satisfaction, and we know how important customer satisfaction is on Amazon. We, eComEngine, have our FeedbackFive tools, so we're talking with customers every day about feedback and reviews and how to get more reviews, how to get better feedback. So, customer satisfaction is crucial.

Colleen: How can a 3PL help improve a retailer's customer satisfaction?

Stephen: Effectively, Amazon does a really good job of that. That's one of the reasons they have the rules that they have is so that it supports basically the Jerry Maguire principle, that you help them help you have good delivery experience to that customer. So, when you outsource or you're using a network outside of Amazon, you need to understand that that 3PL really is going to be your primary interface to your customer base, so you're going to own that transaction.

Stephen: You really need to make sure that that 3PL is geared to toward that, understands that, understands your requirements from packaging to service levels, where the communications are going to be. That's really critical to understand that and make sure that your 3PL is partnering in you in a way that it supports that.

Colleen: Yup. And fulfilling from multiple locations, obviously. Yeah.

Stephen: So, the idea around when you partner with a 3PL, and I'm sorry, Colleen, I didn't get into that particular point.

Colleen: No, that's okay. Yeah. I know we talked about it yesterday and that was a big piece.

Stephen: Yeah. So multiple locations. What's the benefit to having multiple 3PL locations? It really is, the end of the day, having multiple fulfillment locations means you're closer to market. Just means that you have more product closer to customers. It's what really defines what Amazon does really well.

Stephen: What the benefit to you is that you have faster delivery times. You're generally going to have cheaper last mile costs. That means that cost from the distribution center to your final customer is going to be cheaper.

Stephen: The other intangibles are there's few opportunities for delays. The closer you are to market, the less you are susceptible to weather, capacity, any of those other variables that could impact. Then, last but not least is just what that package looks like when it arrives to your customer. So, the closer you are to the customer, the less touches there are, the less hand offs there are, meaning that how the package arrives will look better than if it's farther away, generally.

Colleen: Thanks. Thank you. I'm going to just answer a question here from the audience that came in. Somebody's asking, what is the biggest mistake you see sellers make around Q4? Either of you are welcome to answer that. Off the top of your head, what is one of the biggest mistakes that you've seen that sellers make in fourth quarter?

Stephen: I can jump in really quick and then hand off to Eli. From my perspective, it's planning. It's really not understanding the full capacity of what peak season planning means. So, it's making sure that you ordered it in time, that you can get it through the port and get it to a distribution center, so that it's available for sale.

Stephen: It's making sure that you're working with your partners to make sure that they've made sure... and, again, I'm talking outside of Amazon network, that they have carrier capacity to support your sales in fourth quarter. Overcommunicating with your vendor base, with your 3PL base to make sure that you're aligned with your expectations in terms of buying and capacity. To me, that's the overwhelming mistake that people make is underestimating or under communicating.

Colleen: Anything you want to add, Eli?

Eli: First, I agree with Stephen completely. Again, from our side, because we are a repricer, obviously our customers apply the strategies that we recommend anyway, but what I can say in terms of repricing, because we analyze the competitive landscape for every year, for existence, I can see how all the sellers behave. You can see that some sellers are not making right price decisions during that time, so either being overly aggressive or, on the other hand, just being left behind, so not updating in time and things change and you'll see that there are FBA sellers that clearly have inventory, they're just priced out of the competition and other things like that.

Eli: I would say that's another aspect of it is making sure that you're, if you're already listed, that you're competitive.

Colleen: Okay. Very good. Stephen, we have a question for you. How do you improve your restock limits?

Stephen: In terms of outside the Amazon network, so an outside 3PL network that you're working with, that's just a matter of working with your 3PL to make sure that they understand your capacity, your needs, your inbound volumes, your outbound volumes, and they plan for it.

Stephen: If you're talking specifically about FBA restock limits, I won't speak for the groups, but everything indicates that the only thing they're going to do is go down. Amazon doesn't want to be in the business of stocking, they want to be in the business of selling. So, very much so, I think that everybody needs to be prepared for the fact that those limits will either continue to shrink and that you'll have to ship in more product more often. That's where it really becomes critical, from my perspective, to have another partner that can help you bring your product into scale, bring inbound volumes in that you normally would, and then be able to hold that inventory, prep it, and support your FBA program, and then alternatively have other demand channels to support that volume that you're bringing in.

Stephen: Hopefully I answered that question appropriately.

Colleen: Sure. Yeah. We actually have a blog post also about the FBA restock limit. So, we'll share that as well for anyone to refer to.

Colleen: Another question here for Stephen does a 3PL ship both into FBA and act as an FBM? I think you kind of addressed this earlier, but maybe you could just clarify.

Stephen: Yeah. The short answer is they can. Ideally, I mean, in a perfect environment, that's exactly the kind of thing that you want when you're sourcing out to that 3PL network. That's where I was talking about that truly omnichannel capability.

Stephen: You're going to find 3PLs that do certain things really well. They do pallet in, pallet out or FBA prep work, they do wholesale retail because that's what they've done for a long time, or they're built to do the D to C business. That's where it really becomes... because the act of supporting FBA and FBA prep is really carton level, pallet-level shipments. FBM, you have to be very good at D to C. So, that's a unit of measure issue, that's a system issue, it's a process, it's an experience issue.

Stephen: So, the short answer is when you source your 3PL, make sure that they can do both because the issue is if they don't support your FBM well, you don't have to worry about the FBA.

Colleen: Good point. All right. We have a question for Eli. Can you explain the game theory repricing strategy?

Eli: Yeah. Sure. That kind of goes into what I mentioned briefly. It's a little bit more a theory, it doesn't relate necessarily to Q4. The idea here is this. You are, as a seller on Amazon, all other things being equal, and, again, if you're a Buy Box eligible and your price is okay and everything, it's fine. You're competitive. Your share of the market is going to be determined by a bunch of external factors.

Eli: I know a lot of times you hear people say, "Oh, be successful on Amazon by getting more Buy Box or by so-and-so."

Eli: The reality is, in a competitive landscape, that isn't the case because, and this is where games theory comes into it, it's a repetitive game, so it's not a one cycle kind of present dilemma. You making a price change affects your competitors, and their actions affect you.

Eli: Let's say you're up against one other seller, you're both 50% of the Buy Box. You trying to now gain more Buy Box share because you think it's going to increase your sales and make more money, in effect, doesn't work because if you lower your price, your competitor... and this, by the way, under the assumption that most professional sellers are using some sort of repricing software, will not remain different. They will react.

Eli: A lot of times what will happen is, within the limits that everyone is willing to sell a product, you might end up with the same 50% Buy Box share, same share of the market, just at a lower price. That's all that's going to happen.

Eli: The idea behind using game theory is a bit of just a general term to describe it is to apply your repricing strategy that it assumes that you're going to share your market with other sellers, but try to do that at the optimal price for you. So, really avoiding price wars, but also maximizing on profits where you can by, again, different needs.

Eli: So, by analyzing behavior, you can see that if you can detect that you have a seller that's matching your price, increasing price is beneficial for both of you because if they're matching your price, you go from $20 to $25, they'll follow you, you'll both get $25, again, all other things being equal. And, of course, you can price outside of the markets. If you charge something that the customer is not willing to pay, then it's not relevant, but usually, we're not talking about that. Usually, it's within margins that are acceptable.

Eli: Does that answer it?

Colleen: I think so. Interesting. Good. All right. So, those are all the questions that we have right now. Feel free to add more questions in. We have a few more questions that we will go ahead and ask for Stephen and Eli, but feel free, again, to add any of your questions in the chat or Q&A, and we will address them.

Colleen: All right. So, let's talk about as you get to the end of Q4 and there's holiday returns. They're bound to happen. Eli, what can you tell us about the value of returns and reimbursement data or how analytics could help? I know your tool does offer some data and insights there, so maybe you can speak to that.

Eli: Well, I'll say that, again, we at Seller Snap getting started, we're focusing on creating the most intelligent, let's say, automatic repricer. But, it was clear from the start that analytics and data is an integral part of that because otherwise, you don't know what you're doing. And, as we've grown as a company and the more experience we've gotten, we've learned the importance of this, and we're constantly expanding on this.

Eli: Really, the approach is to have as complete as possible P&L for a listing. So, it's not enough to say, "Okay, I sold for this much. This is my cost, and this is my profit," because, obviously, if you have an item that has a lot of returns on it, and if you give reimbursements or those returns are your fault for whatever reason, all that affects your bottom line.

Eli: If you disregard these, you might say, "Oh, this is a very good item. It's profitable." But, once you factor in returns, reimbursements, other problems, storage fees, and advertising costs and such, but specifically on reimbursement, that has an effect on your decision making moving forward because you might want to say, "Okay, if I have a very high return rate on an item might affect my decisions in restocking."

Eli: Reimbursements, again, just to get a clear picture of P&L per listing so you can see if you're actually making money or not.

Colleen: Again, we see that skew profitability. All right, Stephen, what tips do you have for managing holiday returns? Anything from the fulfillment or warehouse perspective?

Stephen: Yeah. Again, this goes back to communication with your 3PL, 4PL partner. Returns are generally going to fall into two major buckets. You want to make sure that you're having conversations with your 3PL about how you want to manage those two different buckets.

Stephen: The first issue is your standard return. It goes to an undeliverable address, it's carrier refused, it's client refused. That package effectively gets back to the 3PL in the same exact form that it shipped out in. It's something that can be processed quickly and put back in inventory for available to promise. You want to make sure that you have clear instructions with your 3PL that that kind of return, there's standard pricing, a standard process, and that they execute getting that return back in inventory as quickly as possible.

Stephen: The second is the return that needs a little bit of work. Whether you're in apparel or anything else, that product comes back, it's been opened by the client, it needs to have some sort of rework or validation or quality inspection, any of those kind of things before it's put back in inventory. You want to have a very clear conversation with your 3PL about what your strategy is. Do you want them to hold that and consolidate that back to some sort of consolidated return center? Do you want to work through that 3PL directly to manage those returns with you?

Stephen: Have those conversations upfront so what doesn't happen is you end up with a big pile of not so good looking product that you can't sell and the 3PL doesn't know how to manage sitting on a dock somewhere. The quicker that becomes a mess, the harder it is to clean up.

Colleen: Mm-hmm (affirmative). Okay. Obviously, those holiday returns or refunded items are also more at risk to get negative reviews if they're not happy with the item and they're returning it. So, when you're requesting reviews, make sure that you have a process in place that automates excluding any refunded orders from requesting reviews. Our FeedbackFive tool can easily help with that.

Colleen: All right. Let's see. Looking ahead at first quarter, we know that there's a lot of seasonality changes between fourth quarter and first quarter, so it can be challenging to forecast for Q1. What recommendations do you have for sellers as they prepare to forecast for first quarter? Either one of you, if you want to answer it.

Stephen: My first answer is going to be start now. Historically, I know that we've all looked at fourth quarter and get singularly focused on getting through peak. The reality, I think, the new world, the new environment, the new retail, the post-COVID environment that we're in is that you need to start planning first quarter now.

Stephen: You really need to understand what your plan is. There are new peaks that we're seeing across the board. I think the days of getting through fourth and then getting to first are over, and I think you need to start planning first quarter now.

Colleen: I agree. All right. We already had a question, actually just came in, asking if there's a discount for signing up for Seller Snap. There absolutely is. I will go ahead and share the special offers while we address any other questions that are coming in.

Colleen: Seller Snap, as Eli mentioned, it's an AI algorithmic Amazon repricer and analytics tool. Lots of data, data is king. So, it's an awesome tool, and they're offering a 15-day free trial and 10% off a month for your first three months using the link below which my coworker Becky added in the chat. Feel free to sign up for that. I will also send out an email with all of these offers and how to contact them if you have any questions.

Colleen: Stephen, do you want to explain your special offer for Verte? Oh, I think Stephen froze it looks like, so I'll share that.

Colleen: Project Verte is an AI Cloud-based supply chain platform that optimizes your FBA fulfillment. They are offering five integrations included in the program up until December 2021 if you sign up soon. You can check out their website. We put their URL in the chat as well.

Colleen: Then, lastly, our tools that I briefly mentioned, RestockPro is our FBA inventory management tool. We are offering a 60-day free trial right now as well as for FeedbackFive. To get more reviews and feedback this holiday season when there's more sales and more orders, you can definitely get more reviews, but you got to make sure you're asking for them. So, 60-day free trial on that, just use coupon code Q4-2021, and you can sign up at ecomengine.com.

Colleen: We will hang tight here for a couple more minutes, see if there's any other questions that you have on any of the topics that we've just discussed today or otherwise. But, if you need to sign off, we certainly wish you all a happy Q4, hope you have a very successful season. Again, anything that you want o ask our experts here, feel free to fire away in the chat. Any other last minute tips that Stephen or Eli has, feel free to share as well.

Eli: I would say, again, going into Q4, from our perspective and in terms of being priced competitively, if you're not using a tool, set up a repricing tool. There is different ones out there. And, again, depending on who this applies for, even setting up just Amazon's own repricing option in seller central is better than nothing. It has its disadvantages, but it at least make sure that you're not stuck at a price that's not relevant.

Eli: I would definitely say... There is something in here, coming in on how to fix pricing health, min, and max. So, I'll answer that in a second.

Eli: I'm saying you set up something. What we at Seller Snap do, and we see this... and this, by the way, it's welcome and acceptable, is we see people coming in just for Q4 and using the repricer. We know sometimes some stores are very seasonal. Then, they'll use it for the months that they need it and stop using it in January and February and that's fine. I'm saying even if you don't need a repricer for the entire year because whatever business you're running, Q4 is a good time to make sure that you're competitive.

Eli: I see someone asked how to fix pricing health, min and max price. I'm not sure I understand. I'm not sure I understand exactly. Are you saying as far as Amazon are concerned?

Colleen: Maybe you can clarify that question? And, it looks like Jamie has one also related to repricing.

Eli: Okay. Second answer. Okay. Your own brand repricing tool help. Yeah. The question regarding if you own the brand.

Eli: Setting pricing private label if you're the brand owner is a challenge, and it's something that we've been thinking about and trying to come up with solutions for years now. To specifically answer your question, yes, we can track multiple similar ASINs. You'd be able to say, "Okay, ASINs, one, two, three," up to 10 different ASINs, set a rule to have your price adjusted based on the price of those ASINs. You could say, "Okay, I want to follow the lowest price of these," or whatever one with the best sales rank or different options.

Eli: Yes. That's definitely one way to go. Really, depending on what you're selling, in some cases, that's the best option to just make sure you're competitive against the comparable items. But, again, it really depends. If it's exactly comparable items, it's very easy. If it's different, then it becomes more complicated if it's not an identical item.

Colleen: Okay. Jamie asked for me to ask or talk a little bit about how FeedbackFive works.

Colleen: FeedbackFive helps you to automate feedback and review requests. You can either automate the Request a Review button, which is found in seller central, which is 100% compliant because the Amazon message comes directly from Amazon. Or, you can automate Buyer-Seller messages.

Colleen: We also do product review management in FeedbackFive where you can track ASINs, whether they're your own ASINs or competitive ASINs, to track those reviews and get a lot of different analytics on those. So, happy to give you a brief demo of that anytime.

Colleen: Yeah, during fourth quarter, make sure you have a review strategy set up because it's a great opportunity to get more reviews and set yourself up for success in first quarter. All right.

Colleen: I think we are... Yup. I think that's the end of the questions at this point. So, thank you Eli and Stephen for joining us today. We really appreciate it. Everybody who joined today, thanks for being here. I'll be sure to send out an email with all the special offers and a link to this recording so you can watch it again or share it with any of your teammates. Best of luck in Q4. Thanks, everybody.

Eli: Thank you very much, Colleen. Best of luck to everyone. Thanks, Stephen. Bye-bye.

Stephen: Thank you, everybody. Yup.

Colleen: Take care. Bye.