Originally published on August 16, 2018, updated June 17, 2020
In this webinar, Liz Fickenscher and Robin Yarow of eComEngine discuss inventory management strategies for Q4 and Aaron Gooden of CPC Strategy delivers insight about managing your advertising during one of the most profitable times of the year.
You can watch the webinar above or check out the show notes below for the recap and a full transcript.
Finding success on Amazon takes hard work year round. To truly take your business to the next level, however, you’ll have to take full advantage of Q4. Do you have a strategy for staying in stock and making the most of the busy holiday season?
In this webinar, CPC Strategy’s Anson Han and Aaron Gooden hosted eComEngine’s Liz Fickenscher and Robin Yarow for a conversation about preparing for Q4, staying in stock, considering your Inventory Performance Index (IPI) and more!
It’s impossible to overestimate the importance of Q4 for Amazon sellers. According to Han, the retail giant needs to be part of a larger strategy for sellers to focus on Q4 because there is so much potential.
With consumers gearing up for holiday gift-giving, it’s no surprise that the biggest uptick in sales and spending happens in Q4. Meanwhile, out of all eCommerce sites, Amazon is responsible for the most transactions in Q4. In fact, in 2017, Amazon accounted for 45% of orders on Thanksgiving and 55% of transactions on Black Friday. “If you’re going to see success,” explained Han, “it’s definitely going to be on Amazon.”
Yarow stressed the importance of being prepared for demand by saying, “There are over 100 million Prime members now, so it’s a huge advantage if you sell FBA or Seller-Fulfilled Prime — but only if you stay in stock! It can cost you tens of thousands of dollars in lost sales. With the high demand in Q4, you need to pay really close attention to your inventory level.”
Han explained that reviewing how much inventory was pushed in the previous year can help you predict your inventory needs, but it’s important to remember that this is not an exact science. As Yarow added, “A product that you couldn’t keep on the shelves in 2017, might not move much in 2018 — or it could be really popular again.”
Fickenscher used fidget spinners as an example. While they were an incredibly hot item almost two years ago, they aren’t selling nearly as much right now. “It’s really important to know the product, know the market, know the trend, and project the sales outlook for each product that you can sell,” said Yarow.
One of the worst things you can do is wait until you’re in that busy season to start testing out marketing strategies. Begin preparing your Q4 campaigns months in advance so that they are ready and running smoothly when you need them. Since ad copy must go through an approval process, it’s recommended to have it reviewed well in advance. That way, if it needs to be edited, you won’t be scrambling at the last minute.
Also, Yarow explained that it’s really important in Q4 to keep your inventory flowing. "Keep your supply chain moving smoothly. Be prepared for kinks and have a backup plan to smooth out any issues that come up. Take some time to draw out your supply chain so that you are really understanding your lead times, which can get longer in Q4. You want to make things more efficient.”
At the same time, Fickenscher warned that Amazon doesn’t want to be your warehouse. You want to maintain a good IPI. If you do find yourself with extra inventory, consider using repricing strategies to kick start slow moving items and avoid added FBA and storage fees.
Are you ready to jump start the biggest selling season of the year? Definitely watch the webinar for a more in-depth discussion, but in the meantime consider this checklist:
As an invested Amazon business owner, you already know how much hard work it takes to keep things going year round. Don’t miss out on your chance to take your sales to the next level during Q4. A little extra planning can go a long way!
Anson: Hello again, everyone, and welcome to another CPC Strategy hosted webinar. Today, we're co-hosting with our partners over at eComEngine, and we're here to bring you the Q4 Amazon Bootcamp. Actually, we've never used the terminology bootcamp before, so it's exciting, but really, it's talking about staying in stock and on budget this holiday season. We know Q4 is approaching, and we know for a lot of sellers and vendors, it can be pretty hectic. So really, our goal of this webinar is to give you tips, and run you through a quick 30 minute bootcamp of everything that you need to know, to make sure that you're prepared for these coming months.
Anson: And before we do get started though, I just wanted to talk through some logistics for today. Some questions that we just receive a lot about the session recordings and the slides, they will in fact be sent out. So the session recording and the slides will be sent out within 48 hours to the email that you registered in. And secondly, more importantly, we actually have an infographic for you all to download today. So I know that for people that are looking okay, a webinar's a lot of time, or maybe you have to hop out a little bit early, for our attendees specifically, we have a downloadable infographic in the handout section, that really covers pretty much everything that we're going to talk about today, and really, just webinars, just to provide a little bit of context to the infographic as well, and to answer any of your questions that you have.
Anson: And so, that really segues into our third point, which is to make sure that you submit questions to our panelists. Really, the main point of today's webinar is not just to give you the information as well, but to interact with you all, and answer any questions that you may have. So if we're unclear on something, or maybe you have a question specific to you, of something that one of our speakers brings up, feel free to shoot that over to us, and I will be working through those in the back end, and we'll get those questions answered for you.
Anson: So now that we covered today's logistics, we did want to go into who we are. And CPC Strategy, we were founded in 2007, and I believe now we actually have over 500 plus, maybe 600 plus active retail clients. And so, we have solutions really spanning the Google side of the world, Facebook as well, and of course, Amazon, which we'll be talking about with our Amazon sales acceleration program, as well as creative services. And so, we've been able to deliver lasting results for our clients for a little bit over a decade now, and that's something that we're really proud of. But at this point, like I said, this isn't just a CPC webinar. I wanted to turn it over to our partners at eComEngine. Liz, why don't you tell us a little bit about who you all are?
Liz: Hi, everybody. We also were founded in 2007. What a coincidink. So eComEngine is a company that makes software products for Amazon sellers. We're headquartered in Richmond, Virginia, and we have customers in over 120 countries. We provide FBA inventory management, and supply chain management feedback, and review management, and Amazon Marketplace intelligence. And we spend most of our time interacting with awesome sellers, and learning how we can address their pain points more effectively.
Anson: Yeah, great. And that's good to hear. And so, you heard from Liz a little bit, but we do have two other speakers alongside her. We have Aaron Gooden, who is actually recently a Marketplace Channel Analyst lead at CPC Strategy. And like I said, we have Liz Fickenscher, the Lead of Business Development over at eComEngine, and Robin Yarow as well, the Manager of Customer Engagement. So just down the line, Aaron, why don't you tell us a little bit about yourself?
Aaron: Yeah. Hey, how's it going, guys? Again, my name is Aaron, I'm a Team Lead here in the Amazon Marketplace Channel. So yeah, a little bit about myself. I'm actually from L.A., recently moved to San Diego, love it. But I have a lot of experience in managing a lot of our highest revenue clients here at CPC Strategy, and really building out strategies that are going to bring them success overall, not just in the short term, but also in the long term.
Anson: Nice. Great to hear.
Anson: Liz, what about you?
Liz: I'm Liz Fickenscher, I've been with eComEngine for a while now, and I get to talk to sellers and industry partners, and learn everything I can about how to help Amazon sellers, which is sort of my passion. And then in my spare time, I'm obsessed with JD Salinger. So that's a little fact about me.
Anson: Nice. I didn't know that about you, good to know. Robin, how about yourself?
Robin: Hi guys. My name's Robin Yarow, and I am from the Richmond, Virginia area. I've been with eComEngine for almost five years now. I was previously the product manager for RestockPro, which is our inventory management tool, and now I'm really excited to be responsible for customer engagement, or as I call it customer happiness, really working with customers to make them successful and happy with our tools.
Anson: Great. I think that's a great point, and I like that you mentioned customer happiness. I agree with that as well. And so again, those are our speakers today, really well-versed in the Amazon space, and excited to bring you the content of today's presentation. And so, just looking through the agenda, we have four really key, I guess, differentiating sections. The first one being the importance of Q4 on Amazon, the second being looking to the past, so looking at past data points, and what we've seen in years prior, to really predict our future results. Third, Q4 specific tips for both advertising and inventory management. And lastly, we want to emphasize, and can't emphasize enough, that you need to start preparing for Q4 now. So in that section, we'll be talking about really, what you should be doing right after this webinar, or right before this week ends, and we'll be wrapping it up with our final takeaways.
Anson: And in the right hand side, again, you're going to see the infographic. That's just a quick screenshot of it, but again, it goes on for around two pages or so, so I would highly recommend downloading that infographic, as it is only available to you for being an attendee, so good on you all for attending today. And [Hugh 00:06:00], I know you said that audio is not working and it's working now, great to have you, thank you for joining us, and we are looking forward to the rest of the presentation. So like I said, the first section, really just want to hit home the importance of Q4 on Amazon. And I know Aaron, we were talking about it earlier, that Amazon is really starting to take over Q4, and it's part of the larger strategy, I feel like, for sellers now to focus a lot of their time on Q4. So why don't you tell us a little bit about that?
Aaron: Yeah. I mean, obviously you guys, Amazon's the largest converting shopping type engine out there. It beats out Google, it beats out eBay, steadily beating out Walmart. But yeah, Amazon's built that large converting engine out there. I mean, looking at these numbers from last year in 2017 for Black Friday and Thanksgiving, Super Thanksgiving, Amazon accounted for 45% of orders during that timeframe, and also during Black Friday, accounted for 55%, so over half of transactions on Black Friday, which is huge. So again, Amazon again is taking over Q4. You're expected to see a big uptick in sales and spend obviously, which is going to feed into Amazon's flywheel. If you can gain more sales on those best selling products, and more sales on your entire catalog overall with that increased traffic on Amazon, that's just going to feed into Amazon's overall flywheel. And then again, kind of coming back to that point that we touched on, out of all those e-commerce sites out there, Amazon is the largest converting engine there. So if you're going to see success, it's definitely going to be on Amazon.
Anson: Yeah. And I think that's a great point. I think Robin, I think you have a great number to kind of attribute this to, when you're talking about just how many people we have on Amazon now.
Robin: Yes, absolutely. So the good news is, there's over a hundred million Prime members now. So it's a huge advantage if you sell FBA or seller-fulfilled Prime, but only if you stay in stock, because once you run out, then you can't sell anymore. So you're leaving a lot of money on the table if you go out of stock, it can cost you tens of thousands of dollars in lost sales. With the high demand in Q4, you need to pay really close attention to your inventory levels.
Liz: And along with all that that you have to think about, you have to also make sure that you don't overstock, and there's a thing out there called the Inventory Performance Index, we'll call it the IPI score. It's a fairly new metric introduced by Amazon, and I've seen it be the topic of many conversations and seller groups on Facebook, at conferences and more, so we're going to dig into that a little bit more later, so that you can have sort of both sides of the situation. You've got what you need to do to stay in stock, but also keeping in mind that there are things that you should do to not overstock as well.
Anson: Yeah, Liz, and I think that's a great point too. And really, that's what the second section is about is, is using the past to predict our future numbers. So looking at how much inventory you pushed last year, and of course, there's going to be a percentage growth, but I think that gives you a good indication to hopefully, not overstock as much, and of course, not under-stock as well. Before we do get into the inventory management side, I know that we have a lot of great data points just on the advertising side and what we've seen in that space, and really how those numbers have trended upwards. Aaron, if you could talk a little bit about that?
Aaron: Yeah, absolutely. So you guys can see, we've got a couple of lovely metrics going on here. First thing is 2016 versus 2017 for Black Friday, Cyber Monday holiday IN Q4. You can see a 33% plus increase in costs, ad revenue coming in at 26% increase, with a 4% or 5% increase in clicks, and an 11% decrease overall in ACoS, so getting more efficient there. So that's kind of that first point there, is spend will definitely increase, due to a high rate of clicks as you are bidding against your competitors. When you guys are running your coupons, running your lightning deals, running any sort of discount, you're obviously going to be trying to out beat your competitor to win that space, because you obviously feel you have the best deal. That's going to increase the CPC, which is going to increase the clicks, which will then increase spend, so that's where you see spend will definitely be looking to be increased. You can see about from 2017 to 2018, comparing Q2 just with Prime Day, you can see that there's a 347% increase in spend there.
Aaron: But also, we're expecting that revenue to come back from that increase in spend. So deals that you're running, lightning deals, coupons, deal a day, anything like that, you're definitely going to expect a big increase in ad revenue as well. So you can see there about a 451% increase there, which is great. With those two combined, you should see year over year efficiency gains, as you increase your spend and you increase your sales. So that's what you see overall. ACoS will decrease because ultimately, what you're doing is making sure that spend is being spent efficiently, and that that increase in spend is going to bring you an even larger increase in ad revenue, to create some efficiency gains year over year.
Anson: Yeah. And I think that's a great point, and I'm sure we'll get a few questions on this as well, but if you could just... ACoS, what does that stand for?
Aaron: Yeah, so that's advertising cost of the sale. So that's going to be, if you take your... It's a percentage, so you're going to take your spend, divided by the sales that you brought in, and multiply that by a hundred, and that's going to be your percentage.
Anson: Great, okay. Thanks for sharing that. And I think, yeah, the point that we're really trying to hit home, and Aaron, I think you hit it pretty well, is that yes, spend is going to increase, but we're seeing equally, if not more increase or lift in ad revenue, but only if you do it right.
Anson: I think that's the key thing here.
Aaron: Don't mess it up.
Anson: Exactly. And so Robin, I know that as well, you, I mean, over at eComEngine, very data driven, and so if you want to give us some insights on your side of things.
Robin: Sure. So if you've been selling on Amazon for more than a year, you've got the benefit of experience on your side. So you want to take a look back at fourth quarter of 2017, maybe even previous years before that, if you have data available, to look at the sales trends and history, especially for your top selling products. This is a graph from RestockPro, showing the past year of sales and inventory stock levels. So a product that you could barely keep on the shelves in 2017, might not move much in 2018, or it might be really popular again. So it's really important to know the product, know the market, know the trends, know what's going on, and project the sales outlook for each product that you can sell.
Robin: So this will give you an idea of how much more demand you can generally expect in Q4, based on your previous sales history, but you got to keep in mind that sales and demand can change really drastically quickly. You also want to look at year to date sales for 2018, sales data from Q3. You can see items that are trending up in rank or popularity, to get an idea of how quickly your inventory could sell. And then last but not least, analyze your sales from Prime Day, that can be an early predictor of holiday sales patterns.
Anson: Yeah. And again, I think that is great to note. I think Liz, you have a great point as well. When you're just evaluating sales potential, from that inventory that you have through RestockPro, or just that you know you have lying around, how can you properly evaluate that sales potential?
Liz: Well so, you take that data Robin was talking about, and then you ask yourself some really key questions, and you can read these questions. I'm not going to read this slide to you guys and those of you that are going to get the recording. Maybe print this out and then hang it above your computer. I know it's kind of old school, but these are things to really think about. And just to use an example product, think about fidget spinners. You might've sold a ton of fidget spinners last year, but if you've read the Forbes articles and all that kind of stuff, The Rise and Fall of the Fidget Spinner, you have to ask yourself, do current trends support stocking a gazillion fidget spinners for Q4? How have your fidget spinners been selling lately?
Liz: If not great, then your previous sales might not be the most accurate indicator of your Q4 2018 sales, but if you ran out of stock last month, or if you ran out of stock last year, and you know you need to stock some, your supply chain might need some work to make sure you don't run out of stock on items that are going to sell well in Q4. So you really need to factor in your supplier lead time as a part of all this too, you really need to pay attention to that. And then you need to pay attention to is there's some new hotness in your store that's selling better right now. So that's the recent sales, the Prime Day sales. And then I always tell people to look at competing sales of similar items, to make sure you order enough product, because you can see obviously, if you're doing the right advertising, if you're optimizing your listing and all that kind of stuff, the trends can tell you what you need to be selling, and you need to make sure you can get it in stock for that in time.
Liz: And I also tell people to pay attention to product reviews, but that's a whole different conversation, and then pay attention to margin. Finally, just pay attention to margin, and if the margin isn't where you need it to be, then don't restock that item. And you can also ask your suppliers if you can get a discount or reduced shipping. You never get anywhere when you don't ask. So in a nutshell, ask yourself these questions and analyze your data, just to streamline your supply chain, so that runs smoothly during this busiest selling period, because it is, as you guys know, totally, totally bananas. So get yourself ready, and get your processes in line now.
Anson: Great. That's a great point. I love the example of fidget spinners. It's very fitting just to talk about how some of that data could be outdated, and so, really being on top of that. I think in our third section though, we are going to focus specifically on, okay, what can you do for Q4 specifically, on both the advertising inventory management front? And I know Aaron, there are certain best practices that we typically tell our clients, or just tell people on calls and audits, that this is what you should be doing to prep for Q4, and I think you have outlined a good list of that.
Aaron: Yeah. This is definitely things, guys, that you guys want to be doing in advertising, getting ready for Q4, I would say like tomorrow. I know tomorrow is Friday, but you got to do it. So the first thing would be making sure that you're bucketing out your campaigns for deals and non-deals ahead of time. As you know, it takes a bit of time when you launch a new campaign to kind of gain sales velocity, gain sales history, and really kind of get a better cost per click to make yourself more efficient.
Aaron: So it's a good time to start now to get those campaigns up on those products that you know you're going to be running deals on in Q4, and get that sales velocity and sales history established, and get those campaigns steady and stable. So then you can go into the next point, increase budgets on those campaigns, so that your campaigns are lasting all day long. You don't want to be doing an experimental phase with any of your campaigns, especially with products that are going to be running deals on. You don't want to wait until September. You don't want to wait until October, or even November to be trying to test things out. You should have that nailed down, I'd say within the next couple of weeks, at least, put them up in Seller Central, and then let those ads run, so you can start gaining a lot of valuable data, and be ready to go with your budgets and know what to expect.
Aaron: Third point there is create coupons for your best seller or high velocity products. This isn't a time when you want to try to serve up maybe last year's product or something like that. During Black Friday or Cyber Monday, Amazon wants make sure that its sellers are getting the best, the latest, the freshest, the hottest products out there to their customers and their clientele. So make sure you're creating coupons and submitting lightning deals only for those products that have high velocity, because you can only build on that. We don't want to try to revive a product that died a long time ago.
Liz: That's a great point.
Aaron: Exactly. The last thing there is ad copy around headline search ads. Some of you may or may not already know, Amazon is very, very strict and very, very picky when it comes to ad copy that is specific to certain holidays. So Prime Day is a great example that just passed, same thing with Black Friday and Cyber Monday, or even Christmas type ads. Get that ad copy approved now. It does take about 72 hours usually, for an ad copy to be approved, sometimes less than that. Once it does get approved, just pause the ads, so it's ready to go. So when it comes time to launch that ad copy and go live with it, you can just hit enable, and you're ready to go. You don't have to wait for the approval process.
Anson: Yeah. And I think that's a great point. I can't tell you the number of people we've actually had sitting in on webinars saying in the busyness and craze of Q4, that it either got disapproved or is taking longer to get approved, and yeah, just avoid all that, and get it set up now. So I think that's a great point. And Aaron, I wanted to ask you a question we have from Christina, and I feel like this is a very it depends question, but if you could just really briefly kind of talk through what the ideal ACoS would be?
Aaron: That is a fantastic question, Christina, I get that a lot. Basically, it is dependent on you as a seller. You basically, the first thing you want to look at is your margins. If you have a 50% margin on your product after FBA fees, after shipping, all of those costs baked into it, except advertising, let's say you're left with a 50% margin on that product. So that means when you put that product into advertising, depending on your goals, if you want to be efficient, we don't want to eat up the entire margin, so you may set an ACoS goal of 30% on that product. But if you're willing to say, "All right, let's see how much more revenue I can bring in if I increase my ACoS five or 10% above that 30," you may get an extra five grand in sales coming from that. So it really depends on how comfortable you are with getting close to your margin, but that's the first step, is know your margins on your product, and that will help guide in what those ACoS goals seem to be most profitable in advertising that product.
Anson: Great, thanks. Hopefully we were able to answer your question, Christina. And before we do move on, we have received a few questions about downloading the infographic and how to do that. That's actually on the handout section on the right hand side, and if you click the little carrot, it should drop down there for you, and if you click on CPCs Infographic, then it should load up, and you should be able to download it. But with that being said, a lot of what we are going to cover is also in both the infographic and on the slides here, specifically this section. So Robin, I know you have some very Q4 specific inventory tips to go over.
Robin: Yeah, absolutely. So it's really important in Q4 to keep your inventory flowing, keep your supply chain moving smoothly, be prepared for kinks, and be prepared to just work them out and have a backup plan, a plan B to smooth out any issues that come up. If you don't already have one, take some time to draw out or map out your supply chain. Be sure you understand all of the steps, especially if you're using different fulfillment methods to get products from your suppliers to Amazon. Really understand your lead times, and a hint, lead times will probably get longer in Q4. So really look for opportunities to make your supply chain overall more efficient.
Robin: So we all know Amazon does not want to be a storage facility, so it's really important to keep inventory moving through there as well. So use repricing strategies, use advertising to kickstart slow-moving items, and avoid added FBA and storage fees. When items go out of stock in Q4, you usually can't restock fast enough. It's probably going to take longer to get items from your suppliers, and Amazon's inbound shipment processing usually slows down that time of year. So, a good tip is many sellers keep their own supply of inventory, so that they can switch to merchant fulfilled, if they run out at Amazon FBA.
Anson: Yeah. Great. And I think, again, everything that you mentioned, especially with Amazon not wanting to just be a warehouse, really, to be pushing product really makes sense in Q4. So I know on that note, that can really impact your IPI score, which I know that Liz, you have a few tips on, and just really, what is IPI score really, and talking through that.
Liz: So Amazon has introduced the Inventory Performance Index, because there has been a space issue. Those of us that were at Boost when we listened to the rationale behind this, it makes a lot of sense. Amazon doesn't want to be your warehouse, and they can't be. I think they said something like 5% of sellers are below the IPI score of 350, which is made up of several different metrics involving your sales inventory and storage fees, and they're using 25% of the storage in all of the FBA warehouses. So Amazon had to do something.
Liz: So ways that you can keep your IPI score at... 350 is ideal. Actually, you don't want it to be too high. If it's too high, it means your products are flying off the shelf, and you're not expanding your offering, and you're not staying current. So 350 is the score now, it might not always be, but some ways that you can keep your IPI score where it needs to be, is reduce the number of excess units in your inventory. Continuing to keep excess units in stock can decrease your score. Your sell-through rate is important. Your sales should maintain a good balance with your inventory volumes. In FBA inventory aging on Seller Central, there's a column that actually shows SKU level sell-through, based on the past 90 days.
Liz: And then stranded inventory, which is inventory that's not available for sale but it's still racking up FBA fees, in the status column in Seller Central, you can see several different reasons why your inventory might be stranded. The most common reasons are inactive, incomplete, and out of stock. Out of stock, obviously try to restock it, but inactive or incomplete, could be either because something has been returned and damaged, or there could be some sort of hiccup in the Amazon processing. So it's important to investigate that proactively.
Liz: And then your in stock rate shows how much value you're getting from your products by keeping replenishable ASINs in stock, and it's calculated with a big complicated number, and I can send you guys a blog post that explains it all, but this is on the minds of a lot of sellers, and if it's not on your mind, it should be. So it's part of the whole equation, and it's important not to get crazy. So we want you to prepare for Q4. You've got to, but you've got to do it smartly making the right decisions, thinking about all the different things that you have to think about as an Amazon seller.
Anson: Yeah, Liz, great points. And we actually are getting a lot of questions on the IPI score. So if you could just elaborate really briefly, does this apply to both sellers and vendors, and if only to one or the other , where can you find the score?
Liz: I believe that it only applies to sellers, and it's in your Seller Central dashboard, I think if you go to your inventory section, there's a thing that you can click there. And I'll try to grab us a screenshot that we can send out to you guys with the follow-up email.
Liz: So to give you directions on how to find it.
Anson: That's perfect. And I believe Christina is saying it's on the right side, near the bottom of the homepage.
Liz: Thanks, Christina. That was really helpful.
Anson: Exactly, yup. That's why, again, our attendees are our best resource here, so. And I know we're running a little low on time. We will be going a few minutes over to address some questions as well, but I really want to just sum everything up by saying, start preparing for Q4 now. We can't emphasize enough that what you do now is really going to impact what the rest of the year looks like for you. So, Aaron, I know we have three great points for what you should really be doing right after this webinar, and on Friday, unfortunately.
Anson If you want to cover those topics real quick.
Aaron: Yeah. This should be definitely on your checklist for Friyay. So we got get your ad copy approved ASAP, and pause that ad until you need it. Again, we don't want to be battling back and forth with Amazon and sending emails, "Oh my God, I need my ad copy approved! Black Friday or Cyber Monday is going to be tomorrow!" You don't want to be caught up in that tangled web. You want to make sure that you're maintaining sales history and sales velocity on products that you plan on running coupons for. So this kind of goes with eComEngine's recommendation that don't run out of stock of your best seller now, and continue to run out of stock over and over again. You want to maintain that sales velocity, maintain sales history on those products, up until Black Friday and Cyber Monday, so Amazon's more apt to serve that ad.
Aaron: And then the last thing there, is make sure you get your coupons approved, and lightning deals submitted on time. Kind of going similar to with the ad copy, it does take up to maybe three days, just depending on how busy Amazon is, to get those coupons approved, and then kind of similarly with lightning deals, making sure that you submit those on time. I can't tell you how many sellers I've worked with that have missed the mark on that, and submitted them a little bit late, and then have to miss out on all that revenue they could've captured.
Anson: Yeah, again, I think that's a great point. So really should be preparing now, is the main point. And again, I think Robin, I believe this is your slide. It is really the time to prepare now, because a lot of people are ordering now, if you want to tell us a little bit about this.
Anson: Hey Robin, are you there?
Robin: Okay. I am so sorry. Forgot to turn off the mute there. So yeah, many sellers are already preparing for Q4, believe it or not, by July or August. In fact, we have found, as you can see on this slide, that sellers order 32% more from their suppliers in July or August, to prepare for Q4. We see that the highest amount of FBA inventory that sellers keep is in October. Inventory is about 69% higher than in April, which is the slowest month.
Liz: Well, I just recently read an article, a Marketing Land article, that analyzed 2017 holiday shopping data. And sure, like 40% of shoppers start shopping in November, but 19.4 start in October, and about the same amount start in December. So you do have a good percentage of people that start shopping in October, so it's more reason to get your holiday stock in early, but not early enough to damage your IPI.
Anson: Yeah, I think that's a great-
Liz: So I'm just going to keep on standing on that soapbox.
Anson: No, I think that's a great soapbox to be standing on. And I think the way to end it really, Robin, just plan, plan, and replan. How do we how do we talk about this year?
Robin: Yeah, absolutely. So again, it might sound like a cliche, but planning ahead is truly key. Actually, I was on the phone just Tuesday with a big customer and I said, "What advice would you give sellers out there? What's your biggest tip or strategy or advice for Q4?" And they said, "Well, we have a lot of meetings." They said, "We take time to sit down and just talk about what we think is going to happen, and what could go wrong, and what we're going to do, and just really plan." So that's the magic formula, is to be prepared. Study the past, as well as the current trends, to come up with reasonable estimates of how much stock you'll need. Really pay attention to your margins. And make sure you're focused on your best money makers. Begin ordering early, like these guys said, like Friday, and ensure you're getting your quantities that you need on time. As the holiday season progresses, popular items will become slower and harder to get from suppliers.
Robin: Take the time now to audit your listings, get all that detail work done. Look through the pictures and the text, and make sure everything's up to date. Keep watch, and use a tool to monitor your inventory and inventory turnover. Avoid those added storage and FBA fees, like we said, on slow moving items, by offering price promotions or increasing ad spend. And as we've talked about this, slow movers will hurt your IPI score and cut into your margins. Keep your inventory team in the loop on planned advertising, so that they can be sure that they are stocked up for those predicted increases in demand. So it certainly doesn't pay to advertise if you're just going to run out of stock.
Robin: Keep cash on hand. Your suppliers will definitely appreciate prompt cash payments during this busy season, and keeping your suppliers happy is important, so that they will give you great service. Consider keeping some extra local inventory of your most profitable sellers. That way, if you run out of stock at Amazon FBA, you can switch to direct fulfillment and still get those sales. And then last but not least, but have a plan in place for soliciting and acting quickly on feedback. Keeping your customers happy is really important, and you certainly don't want to risk getting a bad rap on Amazon this critical time of year.
Anson: Yeah, I think Q4, a lot of times, can be the make or break it for people that are selling, because there is so much volume, like we've mentioned. And so, really just the final takeaways, I think we've harped on it again and again, is just starting out, if you haven't already. Really start looking into your sales history of products that you're running deals on, or plan on running deals on. And then on the inventory management side, to just keep a very close eye on your inventory, both your inventory and your IPI score. And lastly, just make every day count. Q4 is crazy, but it's crazy good for businesses that really do it correctly.
Anson: And so, I know we're a little bit over time, but I did have one question for each of our speakers today. Aaron, first question to you. We have a question for Rachel, who really wanted to know, "When does it make sense to start running those lightning deals and coupons? Is there a certain date where you kind of hit a mark and say, okay, after this date we should start being really all in on this?"
Aaron: Yeah, that's a great question. So I would say definitely looking at Black Friday, Cyber Monday, you want to make sure that you have that coupon running the day of for Black Friday. Let that coupon run, and end probably likely on Sunday, and then serve a different coupon on Monday. That way, it kind of entices your clients or your customers that are shopping for your product, or anyone that has brand loyalty to your product, that you hit them with one deal on Black Friday, but then hit them with a different deal on Cyber Monday, so it doesn't get stale and you don't lose velocity there.
Aaron: And then kind of looking at Christmas, a little bit different. Christmas, you want to kind of taper things down a little bit, leading up to Christmas. So December 22nd, 23rd. After the 22nd, actually, Amazon doesn't guarantee that your product will get there on Christmas. So that's when you want to make sure you really start tapering things down, it's probably the 20th through the 22nd. Then have advertising jump right back up, increase your bids, increase your budgets after Christmas Day or on Christmas Day, because obviously, people will have gift cards, all those things that will really be flooding the marketplace to look for a really good deal. And so, you want to have your lightning deals or your coupons running simultaneously, to go along with that December 25th, probably until the new year.
Anson: Wow. Hopefully that timeline answered your question there, Rachel. Very comprehensive, I like it. Liz, we're actually running to you now. And so, I know you mentioned, obviously you don't want to score below 350, but 750 is too high. Someone was asking, "What is the ideal IPI score? Do we know that?"
Liz: I don't think that Amazon has been completely explicit about that, and I think there's a reason for that. The score exists to sort of keep space available at Amazon, and what we learned at Boost, is that the needle is going to change depending on the amount of available space in FBA warehouses. So they want everybody to be above 350. I heard some grumblings and some rumors that maybe 450 is perfect, 500 might be great, but I did hear that in the 700s and 800s was too high. But again, none of this is released by Amazon, this is what I've been hearing in the seller community. So I think if you keep it above 350, you're going to be fine, no matter what. I don't think that you need to necessarily... Until more information is available, be an overachiever in that particular aspect, but definitely keep it above 350, and keep it comfortably above 350, that one mistake or one slip up isn't going to put you below that.
Anson: Yeah. And again, I appreciate the transparency there, and hopefully we were able to answer your question. Last question, Robin, we're coming straight to you. Sarah was wondering, "So I know you mentioned feedback. How often do you look for feedback, or how often should you look for feedback to respond to, especially in Q4, when you have so many other things going on? Is best practice, daily, hourly, even?" Again, I feel like that's a very interesting question.
Robin: Yeah, absolutely. That's a great question. So I think the best thing you can do is put some type of software automation in place, so that you get alerted when you get feedback that you really need to act on. So any kind of negative or neutral feedback that you get, you want to make sure that you are aware of that as quickly as you can, and you get something out to the customer, to sort of mitigate the situation and make them happy. So, I recommend just having some kind of automation to make it easier, so that you're not having to remember to go check every hour or every day.
Anson: Yeah, that's a great point. Yeah, of course. Great point there, Robin. I love it. And again, I know that we couldn't answer every question here today. I do apologize, but if you have any other outstanding questions, feel free to forward it over to us at email@example.com. And if it's a question specific to the eComEngine team as well, we'll be sure to forward it over to them.
Anson: But I can't thank you all enough for joining us. I know that over 30 minutes of your time is really valuable, especially as we start ramping up for Q4. So hopefully, you were able to get some nuggets, and especially those slides where we're talking about start preparing now, hopefully within the next few days, that is something that you are looking to implement. Again, if you are looking for the infographic that is downloadable, it is in the handout section on the right, until we close off this webinar.
Anson: And I did want to thank our speakers as well. Aaron, Liz, Robin, thank you so much again, for putting everything together and putting it into a bite-size webinar. At least from us over at CPC and our partners over at eComEngine, that is all that we have for today, but we do wish you a happy Q4. Hopefully, it's not too stressful, and hopefully, you do set yourself up for success in Q1 of 2019 and beyond. But that is it from us over at CPC Strategy in sunny San Diego, signing off. Have a good rest of your day.
Originally published on August 16, 2018, updated June 17, 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.