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Q4 can make or break your Amazon business. That’s why Amazon sellers have a rush of emotions when Q4 is fast approaching. It’s both exhilarating and stressful, money-making and hair-pulling.

Q4 is quickly on its way, and your business needs to be prepared if you want to see major success.

In fact, for some businesses, Q4 makes up at least half – if not more – of their annual sales. And these aren’t stagnant sales. Q4 finishes off your fiscal year strong while also setting the tone and momentum for next year’s growth.

So how do you create a million or multimillion dollar Amazon business by building a profitable Q4? What do the best Amazon sellers do to prepare for Q4?

group of business people looking at the graph on flipchart

1. Have a plan.

You’ve heard it before, and you’ll hear it again. Having a concrete plan is the only way to see success in Q4.

Amazon sees about 30% more sales volume during Q4. As the tide rises, all boats rise as well. This means that as Amazon’s web traffic increases, so will your opportunities for sales.

But you can’t start sailing into uncharted waters without a map.

Your plan should include everything from previous years’ numbers, projections, objectives, and a course of action. This starts with setting a foundation of goals: are you going to focus more on sales volume or profit margin? This will help you determine your sales and marketing strategy moving forward.

When you look at last year’s data, you’ll get a better idea of what your projections for this year should look like. What did you do well last year? What could be improved? You should also consider your first three quarters to determine how your Q4 might go.

Learn more about analyzing last year’s data to create this year’s projections here.

“Failing to plan is planning to fail.” – Alan Lakein

2. Watch your inventory.

The biggest mistake sellers make is not appropriately estimating their inventory. Your inventory should be top of mind for Q4.

If you have too much inventory, you’ll end up cutting drastically into your profits. Not only will you have to put these items on sale next year, but you’re also unnecessarily paying for warehousing space for inventory that isn’t even selling. Overestimation can leave you with unsold, costly inventory that can cut your Q4 profits drastically.  

But not having enough inventory is equally problematic. Some sellers like the feeling of being “sold out,” but selling out means you’re missing out on more sales and profits. You’re leaving more on the table that your competitors can come in and swoop up.

So how do you determine your inventory?

  • Review your Q4 sales history from 2017, 2016, and 2015.
  • Review your sales from the other quarters of 2018.
  • Look at Google Trends to see the historical and seasonal popularity of your products.  

When in doubt, remember that Amazon’s sales volume increases by about 30% in Q4. You can estimate that your business might do the same. (We don’t recommend living by this method, but if you’re a new seller without data, it’s a good place to start.)

Which is the lesser of two evils: overestimation or underestimation? We tend to lean towards overestimation. It’s better to have slightly extra stock that you can sell in Q1 than miss out a number of Q4 sales, losing customers to your competitors.  

3. Get your FBA in early.

Buy Box competition is especially fierce during the fourth quarter. In the holiday season, sellers who use FBA (Fulfillment by Amazon) almost always win the Buy Box over FBM (Fulfillment by Merchant). This is because Amazon wants to ensure that their customers get the fastest delivery possible, especially during this season.  

But Amazon charges more for warehousing during the holiday season. It’s also much harder to get space in the Amazon warehouse if you don’t already use FBA. Demand for stock is high, so you want to make sure that you get your products to Amazon’s warehouse as soon as possible.

Amazon will assess inventory for long-term storage fees on August 15. That means you want to start sending your merchandise as early as August so Amazon knows the approximate amount of space you’ll need in their warehouses.

Nevertheless, you may not be able to use FBA for all of your products—and you may not want to. Storage costs can be high, so you’ll want to be strategic about which products need FBA and which you can send through another avenue. Typically, your highest volume, most popular, and most profitable products should go through FBA in Q4.

4. Know when to place your orders.

Along with limited space, you want to make sure that your producer has the bandwidth to produce your goods. If you order your products too late, your manufacturer might not have the time or resources to get your goods in on time due to an influx of orders.

This means you could end up way behind schedule, unable to offer your customers the products they want for the major holidays. It also drastically impacts your ability to host holiday marketing promotions—which is the lifeblood of Q4.

Plus, Amazon sets a cut off date. They won’t accept incoming shipments of goods after a certain date for Black Friday/Cyber Monday and Christmas. This means you need to make sure your orders are in Amazon warehouses early so you don’t get shut out of FBA.

When should you start ordering?

As soon as you know how much inventory you’ll need. Even if you don’t have exact projections just yet, start ordering your first batch of products so you don’t overload your manufacturer as it gets closer to the chaos of Q4.

 business people discussing the charts and graphs showing the results of their successful teamwork

5. Watch your competitors.

The best sellers on Amazon know how to beat their competition. It’s as simple as that. So you want to be aware of the products and price points of your competitors. You can also estimate their approximate inventory, which can impact your ability to sell.

Let’s say that you and your competitor are both selling Halloween costumes. Your competitor starts selling them at a low cost in September. This means they’ll likely sell out by October. As it gets closer to Halloween, you can take over the Buy Box at a higher price point because your competitor has sold out (and customers are getting more desperate). In this case, that would mean you might need fewer inventoried items because you can sell at a higher profit.

It’s important to note that a lot of new competitors hop on Amazon during the fourth quarter. This means unexpected challengers will be trying to steal your sales and Buy Box. But, if you’ve already been selling on Amazon, you have one major advantage over them: sales.

You have reviews, sales volume, and a seller rank under your belt that can help you “look better” in the eyes of Amazon’s search algorithm. Make sure you focus on these areas in the next few months to have more quality reviews and a better seller rank—which is what will ultimately put you ahead of your competition.  

6. Grow your business.

Million dollar sellers seldom do it alone. They have a team of workers handling the day-to-day tasks, so they can focus on the big-picture strategic decision.

This may mean you need to hire some in-house employees for the season (and consider holding them as you grow in the future). Or you may want to outsource some tasks for Q4. For example, you could hire a freelancer to handle all of your customer service inquiries. Or you could outsource fulfillment to Amazon (FBA). Or you could hire a content consultant like Seller’s Choice to handle your marketing and promotions.  

Sales growth also means team growth.

Conclusion

Building a million dollar business on Amazon isn’t as hard as some imagine. You need to put in the time to evaluate and reevaluate your strategy throughout the year so you’re constantly pushing for growth.