UPDATED ON APRIL 14, 2021
Remember the days when Q4 was the focal point of the year for retailers? 2020 certainly stole that spotlight and pushed any semblance of normalcy to the back seat for much of the year. But thankfully, we are gradually shifting back to normalcy and it’s go time.
Year over year, restrictions on Amazon continue to increase, so it’s imperative that you start planning no later than late June. Which is now, folks! That’s why we’ve put together this prep guide. This guide will help you put Amazon Q4 prep back on the roadmap and set yourself up for success. (Here’s hoping we don’t get yet another curveball – like locusts, that would be very bad.)
How to Start Q4 Planning for Amazon
Designate Leaders to Guide Strategy
Your future success ties back to your team and partners. You need to start with a look at your internal teams. Who within your organization is taking ownership of Amazon? Does that person need additional support? Who are your warehouse and shipping partners? Do you have SLA’s in place that you can count on? Many brands turn to an expert partner to help fill those gaps, leaning on Amazon-focused digital agencies or retail partners that conveniently come with a fully stocked tool belt of standard operating practices and resources.
Regardless of what your team looks like, you need to finesse and develop an org-chart that explicitly designates working procedures, growth targets, demand forecasting, warehousing solutions, and marketing per person. Your success is tied to those KPI’s, and your team should have them top of mind as well.
If you don’t already, begin scheduling quarterly business reviews to allow for pivot time if the KPI’s are not lining up with targeted goals. Take inventory of segmented portions of your operation: What do stock levels look like? Have we heard of sourcing issues? What are our customers saying? Are there any product issues noted from reviews? What does your Amazon presence look like? How are advertising budgets performing? The answers to those questions will drive the strategic implementation and changes for the upcoming quarter and help position you well heading into Q4 on Amazon and beyond.
Conduct a Content Audit
In line with the basics, commence an audit of your catalog and corresponding creative assets. As Kaspien says, “People remember 80% of what they’ve seen and just 20% of what they read,” which is an important reminder. At minimum, the top 20% of your product catalog should have Amazon-compliant and visually exciting A+ Content to boost shopper buying confidence. Then stroll on over to your Storefront – have you organized your product categories in a logical fashion? Is your brand story being portrayed to meet customers at an emotional level?
Check out our on-demand webinar, 12 Amazon Marketing Opportunities & How to Use Them.
A+ Content and Branded Stores are one of the simplest ways to communicate who you are as a brand and reduce negative reviews. If you can write a big green check mark next to that advice, then take it one step further. Determine which products could use a ‘seasonal facelift’ and find ways to incorporate holiday themes into the gallery of your product detail pages. If you are a manufacturer of photo frames, could you photoshop a snowflake into the frame? Small changes to your organic marketing efforts can make a big difference when customers are scrolling through hundreds of products trying to find a gift. Simple images that naturally connect dots in our brain are a sure–fire way to stand out from the crowd.
COVID-19 Impact to Supply Chains in 2020 and Q4
Remember the wonderful year of 2020? Yeah, me neither. What we do remember are extended lead times and quantity restrictions imposed by Amazon. Our Purchase Order Director, Ned Woodward, shared his thoughts on the turbulent year:
“Lead times actually started to spike in March of 2020 when COVID hit due to the fact that many brands source directly out of China. COVID shut down many factories and port operations, triggering a domino effect as the virus spread globally and started impacting supply chain stateside. This led to anything from several-week delays to complete halts on production in more extreme cases.
“Brands were also forced to re-forecast production/sailing from China based on all of the supply chain constraints with COVID. Instead of planning 4 weeks out, brands had to coordinate 8+ weeks in advance to guarantee vessel space from China. In addition to delays, brands have seen spikes in container freight rates out of China, 45%-50% higher than normal rates in some cases.
“To make matters worse, Amazon also imposed Amazon Quantity Limits (AQLs), which limited how much inventory Sellers can send into FBA at the ASIN level. Prior to AQLs, brands could send in enough inventory to satisfy whatever coverage they wanted, as long as they had storage capacity. Now, brands can only send in what they are limited to, and cannot replenish until the AQLs will allow. In some cases, this forces out of stock on FBA, which can negatively impact listing ranks, pricing, customer experience, and overall brand presence.”
How to Plan Earlier for Q4
Given the turbulence of 2020, we asked Ned to share some advice for why and how brands should be planning for Q4 earlier this year. He recommended:
- Start talking to your manufacturers earlier to ensure you can source inventory to support your holiday sales. You may need to arrange sailings at origin a month or two earlier than you would have in past years. Source domestically as much as possible.
- Budget for higher freight costs when sourcing out of China. The 45%-50% freight increases could be here to stay well into Q3 and beyond based on market expert predictions.
- Have fulfillment options to back up your FBA stock (MFN, SFP, Deliverr) in case AQLs are still around come Q4. AQLs will limit what you can send in and tight timelines for replenishment into FBA could lead to out of stocks. Brands can no longer rely solely on FBA to ensure success through the holiday season on Amazon.
AMAZON Q4 TIMELINE
Determine Q4 Stock & Lead Times
Given how tough Q4 was in 2020, it’s even more important to do your due diligence this year. Determiningg stock and lead times is one of those tasks that will be critical for a brand to take ownership of. You need to know what your expected lead times will be, based on where your product is manufactured.
If that’s proving difficult due to the Coronavirus affecting predicted ship windows, you’ll need to be ready to invest in more expensive options. Air freight is the most expensive option, but it delivers results. Costs range greatly by product and day, and fees are based on “dimensional weight,” so cost also varies greatly by the volume you ship. Due to COVID-19, the costs of air freight have increased dramatically from where they were a year ago, so this should be a last resort.
Get creative with your strategy and think outside the box. If you have sourcing issues with your manufacturer, look for unique ways to fill in the gaps. Are portions of the product or packaging not sustainable? Could you find a U.S. based manufacturer that can make the product out of recycled materials instead? Invest in new partnerships right now to ensure you don’t reach 10x growth without inventory to continue the trend.
Some sellers have learned a hard lesson about tardiness in past years, and we’ve all learned from those mistakes. Amazon implemented key FBA holiday selling dates for Amazon.com that can act as a guide right now. Below are deadlines for Q4 in 2020. Dates for 2021 are still being finalized by Amazon.
Apply to Applicable Categories ASAP
New brands and products have an increased hurdle this year, as Amazon continues to increase its barrier of entry for some categories. Recently, our brands have experienced issues in gaining access to the Personal Safety and Household & Medical Supplies and Equipment categories, requiring them to apply and, in some cases, wait over a month for any response.
Start this process immediately to ensure you gain access prior to using expensive shipping methods to get your product here in time. On this note, it never hurts to have a marketplace back-up plan. Is Walmart a good fit for your products? If so, begin the process of either finding a partner to help you launch there or apply on your own. For more information about Walmart, read our blog here.
Use Prime Day to Inform Amazon Q4 Strategy
While certainly not its primary purpose, Amazon does provide a convenient holiday that is a perfect opportunity to analyze sales, brand visibility, and advertising performance – Prime Day! Prime Day is a phenomenal opportunity to get a peek into the future and collect data points that should be used to develop a Q4 strategy. The increased volume of shoppers, increased ad spend, and heightened opportunity to rope in new loyal customers creates a similar landscape to what Q4 looks like on Amazon – namely, weeks prior to Black Friday and up until December 15th. Check out our top 5 tips for how to maximize Prime Day sales.
There are whispers that Prime Day will be moved to September, given the current situation, which is considerably later than past years’ July dates. While that reduces the time you have to use Prime Day stats to your Q4 advantage, don’t cut it short. Sources say there could be a ‘Summer Sale’ that can act as a great segue into Prime Day and thus provide two pools of data from which you can develop strategy.
Meltables Will be Accepted Starting October
There are a few additional key dates that are certainly worth sharing for the world of meltable products. Per Amazon, meltable products are accepted at FBA centers from October 16th to April 14th only. ‘Meltable’ refers to heat-sensitive grocery, health, and personal care products that are eaten or swallowed, including chocolate, gummies, and probiotics.” Brands that fall into this category should work backwards, using their lead time, to understand when inventory should be prepped and ready to send back into FBA.
AMAZON MARKETING FOR Q4
Create a Product-Level Advertising Strategy
If ever there was a secret sauce for Amazon, advertising is it. Amazon Advertising is one of the most profitable areas of Amazon, and Pivotal Research reported that, “Amazon is expected to reach $38 billion in advertising sales by 2023.” If something is making Amazon money, you need to pay attention to it, because you can guarantee they are.
Many brands find this planning metric quite difficult, given the variety of aspects that span budget constraints, inability to see into the landscape future, and catalog size. To avoid a “drinking from the firehose” situation, go back to your basic target planning. If you have a partner, sit down with them and discuss what your high-level goals are. Use resources around you to understand target ACoS, ROI, ROAS, and budgets. Spend some time doing the math to understand your per product margin, and work backwards to figure out how much you’re willing to spend on customer acquisition.
Watch our on-demand webinar about How to Create High-Performing Amazon Ad Campaigns.
Many brands fall victim to assigning one target for their entire catalog, but if you have multiple products with varying price points, then you should be developing an advertising strategy at the product-level. A product that’s 5% over the target ACoS needs to be optimized differently than a product that’s 20% over the target ACoS. Even if your target ACoS is the same across the board, varying price points necessitate a product-level strategy. A $10 product with a 10% target ACoS needs to be optimized differently than a $100 product with a 10% target ACoS.
Amazon PPC Management Software Can Help
This is no small feat, so find time and cost saving tools to help you do this. We’ve even built one: Kaspien AdManager. Our 30-day trial allows brands to test our strategies and see results before committing to a subscription. Explore your resources and network with others in the industry to help yourself.
Work Backwards from Goals
To understand performance and refine strategy, you’ll need to track advertising KPI’s. Start with goals: Define when you will bid up and bid down, how you’ll mine high-converting search terms and at what frequency, in what ways you will identify low converting keywords to be added as negative keywords, and finally, what your daily spend budgets need to be in order to work within your product level margin. Remember, Amazon only gives you advertising data for about two months, so find a way to store this insight and lean on the findings once Q4 rolls around.
Use Amazon Promotions Before Q4
Seemingly overshadowed by the power of Amazon Advertising are evergreen marketing tactics that deserve a fighting chance: Promotions! Start running promotions now, collect the data, store it, and analyze it. Lean on a combination of tactics, including coupons, Deals, BOGOs. While each targets a different subgroup of shoppers, you’re gaining insight into what lowered price points increase sales and which promotion types yield successful results and should be used during Q4. Hot tip: Today’s Deals during Q4 are about as crowded as B&M stores on Black Friday, so think about using other promotions, like coupons, to help carve out a space for your products in the rush.
Advertise Beyond Amazon
Additionally, one of the most successful tools Kaspien has used to circumnavigate the crowded Deals section during Q4 is off-Amazon advertising. Inventory your visibility on other platforms, like Facebook, Instagram, Google, etc., and start A/B testing ad types on those platforms. While some categories are better fit for social advertising, don’t be afraid to get creative here. Who would have thought that a face shield would be a prized holiday gift? Use that to your advantage and sync up with partners in the space to help build content and advertise your product in ways that you hadn’t previously.
Influencers are another incredible way to call out to both niche and major segments of the population and get eyes on your brand. Many brands halt at the thought, thinking their products just aren’t a great fit – but you’d be surprised. And you don’t have to spend a fortune, tapping into micro influencers can be a powerful option.
Take this example:
“Watchmaker Daniel Wellington is known for collaborations with fashion and travel influencers, but the brand also frequently works with CanadianBros (@CanadianBros), an Instagram account for two dogs named Jasper and Louie. Though dog lovers isn’t an obvious audience for a watch company, the fact that the account has featured Daniel Wellington on more than one occasion indicates it’s working. In one post, Louie gazes up at his owner who just happens to be wearing a Daniel Wellington watch. Like many of the account’s other posts, the caption is from the pup’s point of view.”
The big bonus here is most influencers allow brands to have rights to the content they develop which can be used on your direct sites, social pages and even Amazon.
More free resources
Q4 Planning Starts Now
We are living in a different time, and while nothing is certain, being a brand on Amazon puts you at an advantage during the holidays. Customers can shop from the safety of their couch, and you can help put a smile on the face of recipients around the country.
Think of the extra time you have as an opportunity to really give Amazon Q4 the planning it deserves. Sit down with your teams, cultivate your goals, develop new relationships, and talk reality with your suppliers. Look at your products through a new lens, play around with organic marketing tactics, and take the time to implement an advertising strategy that spans both marketplace and beyond. The time is now. And if you need support, you can always reach out. We’d love to chat about your goals and the tools and services we have to help you reach them.
Happy Q4 planning!
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- Want to Sell on Amazon? Here’s Everything You Need to Do Before You Start - January 25, 2021
- The Ultimate Guide for Planning Your Amazon Q4 Holiday Strategy - June 30, 2020