Special Considerations for 2022 that Impact the Amazon Holiday Event Calendar
You know your product best, such as when you’re expected to have increased sales throughout the year. Whether sales are based on the season or heightened by holidays or Amazon events, it is crucial to plan ahead for those peak moments. But these are standard considerations, year in and year out. This year is expected to have its own unique challenges beyond the usual considerations.
Longer Lead Times
The supply chain is a mess. Delays in the ports and trucker shortages are still wreaking havoc on brands. While we can all hope that these issues will ease throughout the year, it is unrealistic to expect them to resolve any time soon. This means that all lead time estimates need to be extended. You’ll need to start planning production and logistics 2-4 weeks earlier than you traditionally would.
If you ship your goods from Asia to other marketplaces, this may be the year you want to look into the Amazon Global Logistics program to see if it fits your brands needs. Kaspien has seen encouraging lead time improvements and cost savings with this program compared to traditional shipping methods.
Amazon Quantity Limits
The slowed supply chain caused many sellers to flood FBA warehouses, unsure as to when they might run out of stock or when they would be able to replenish from overseas. This caused Amazon to enact Amazon Quantity Limits (AQLs).
FBA storage limits are calculated considering the following factors:
- Your sales volume, including seasonality
- Available fulfillment center capacity
- Your historical Inventory Performance Index (IPI) scores
On January 1, 2022, Amazon reduced the IPI score threshold from 450 to 400, but space is still very tight and there’s no guarantee they won’t go back up again. Since the start of the pandemic, Amazon has been frantically expanding their network of FBA warehouses, but relief may not last. As the saying goes, “Hope for the best. Plan for the worst.” Exceeding your AQLs will result in losing your ability to create new inventory shipments and refusal of excess goods upon arrival to FBA.
To stay on top of these restrictions, it’s important to keep an eye on your Inventory Performance Dashboard so you know what your AQLs are and when you’re close to reaching them. If storage is getting tight and you know more is on its way, you can:
- Try to sell through your current inventory through sales and deals
- Request excess inventory sent back to you with a removal order
- Request older inventory to be disposed of with a removal order
FBA has its advantages, but in today’s climate it also has some very big downfalls, several of which we have just finished discussing. When items go out of stock, it has repercussions on more than just sales velocity. Listing rankings, SEO rankings and IPI scores are all impacted negatively when stock is unavailable. With longer, more unpredictable lead times, fulfillment diversification is key in 2022.
Whether you have your own FBM networks or you lean on a 3PL partner such as Kaspien to extend your logistics network beyond FBA, flexibility is crucial for success on Amazon this year. Multiple fulfillment channels will safeguard your listings from out-of-stocks while you navigate the delicate balance of sales vs. restocking vs. AQLs. Not sure where to start diversifying? Let Kaspien help decipher what options fit your brand’s goals best.