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November Newsletter

In this month’s newsletter, Buy Box Experts examines key topics on which brands on Amazon should focus through late December.

What Does Black Friday/Cyber Monday Look like This Year on Amazon?

 

Major retailers have already announced that they will not be open stores on Black Friday (though we expect their online shopping sites will continue to be operational for holiday shoppers). With its upcoming Holiday Dash event, Amazon will offer holiday shopping specials normally reserved for Black Friday, but now running throughout November.  Consumers are being encouraged by retailers to stay out of physical stores.  COVID motivates consumers to do more online shopping anyways. We expect to see a huge year-to-year increase in Q4 online shopping.

That expected sales increase will not likely be supportable with adequate last-mile delivery if orders are concentrated around the traditional 5 days of Black Friday. It makes sense that Amazon would seek to spread out demand (and orders) across as much of November as possible.  By starting promotional sales earlier in November, Amazon aims to get more demand addressed earlier in the month when there is more last-mile delivery capacity available.

Our Take

All retailers not called Amazon are reliant on UPS/Fedex/USPS to handle last-mile delivery of their online orders. We anticipate that brands & sellers will see strong Amazon demand starting earlier in November. But that demand will carry on right up to a couple days before Christmas. Amazon is better equipped to ensure on-time delivery through its own massive last-mile network. This will draw consumers to Amazon, as it will be able to support on-time delivery right up to evening of December 24. For most other retailers, they will need to shorten the last day of shopping to guarantee on-time pre-Christmas delivery, or face a sharp increase in shipments unfortunately arriving after December 24/25.

This Q4, brands should expect to see a larger proportion of their sales being online, with Amazon a clear winner. If brands’ Q4 inventory can’t all be Prime-eligible, we strongly urge 3P sellers to tighten their cut-off dates for last-minute Fulfilled-by-Merchant (FBM) orders to a date earlier in December. Such actions will ensure adequate time for the non-Amazon carriers to deliver FBM orders on time.

FBA Returns May Pile Up in January

This holiday shopping season, there will be higher demand for Prime-eligible products. Amazon has also extended its return period for FBA orders. As a result, we expect that FBA sellers will experience more returns than ever before, likely creating substantial processing of returns by late January.

Our Take

FBA sellers should remove unfulfilled inventory quickly in January. This helps to avoid FBA storage fees, and provides sellers with more time to test/grade returned products. If holiday Amazon FBA sales are 2x than last year, we expect FBA sellers could see returns that are 2.5-3x the normal return levels. While many returns will be new-condition returns that don’t require testing/grading, we have not seen many Amazon sellers handle returns in a sophisticated manner. Plan for the inevitable: higher return rates will require more staffing and attention.

 

Upgrade Your Keywords and Recalibrate Spend for Amazon Advertising for Q4

Amazon Seller Central now offers the Brand Analytics tool, so brands can examine whether Amazon customers are still using the same search terms this Q4 to find products.  Let’s say you are selling blankets that have pink elephants printed on them. Search terms suitable for ad bidding could include terms like “elephant gifts” or “pink gifts for girls” that might be missing from your campaigns because they don’t get much search volume and sales during the rest of the year. Brand Analytics can provide insight on these changing consumer search behaviors.

Using Q4-2019 data from our friends at Kenshoo, we see that peak impression volume on Black Friday, and highs again on Cyber Monday. Both total spend and Cost per click increase >40% around Black Friday.

Our Take

Upgrade your search terms now, helping organic and paid search. The Brand Analytics tool can help brands find the most relevant, high-traffic terms for their products. Buy Box Experts provides a list of the top 1,000 keywords for your brand organized by which ones have the highest opportunity to drive traffic and increase conversions. Schedule a FREE Market Share Analysis with one of our experts today! 

Amazon Q4 Inventory Challenges

Since the start of COVID, Amazon has not increased fulfillment space to keep up with the increased consumer demand. As a result, Amazon has put significant limits on how much inventory can be stored in its fulfillment warehouses, for both 1P brands and 3P sellers. Amazon’s fulfillment centers are already full. Amazon is experiencing 3+-week delays in receiving new inventory. This creates multiple exposures for brands and sellers. Their Prime-eligible inventory may run out well before the end of December. And they may not be able to replenish such inventory in time to avoid costly Prime stockouts through Christmas.

  

Our Take

We urge all brands to look into either a drop-ship option (1P) or a merchant-fulfilled option (3P) to enable Amazon customers to be able buy their products, even if the brand’s/seller’s fulfillment service isn’t as convenient as Amazon Prime / FBA. We also urge 3P sellers to be prepared to replenish FBA stock every 2-3 days, even if that means small package shipments into Amazon’s fulfillment centers.

Finally, we urge 3P sellers not to forget to reload inventory a few days before Christmas, so as to avoid potential stockouts after Christmas. It is not uncommon for sellers to run out of stock before Christmas, and not get around to replenishing until second or third week of January, costing them lost sales and critical sales ranking.

 

Upcoming Webinar

Join Buy Box Experts and TaxJar on November 5 for our upcoming webinar: “What Established Brands Need to Know As They Accelerate Sales on Amazon”

Featured Partner:
Riverbend Consulting

We’re thrilled to introduce our partner Riverbend Consulting this month! Buy Box Experts only partners with the most trustworthy, dependable companies, and Riverbend delivers.
Riverbend’s team is made of ex-Amazon employees, experienced sellers, and experts with the knowledge to get sellers reinstated – fast! Beyond reinstatements of accounts and ASINs, Riverbend also offers monthly Seller Account Protection and helps with reimbursements and buyer messagingIn addition, Riverbend offers placement in Editorial Recommendations to get sellers on page 1 of search. They work with all sizes of sellers, from mom-and-pop operations to several sellers in the Top 10 on Amazon.

BuyBox@riverbendconsulting.com
877-289-1017

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