The holiday shopping season is right around the corner. *gasp!*
Just kidding! This is no surprise to any retailer. And if it is… um, well, this insider guide can be the time saver you need to get your Amazon strategy rolling. (And good luck!)
As seems to be all too common these days, change happens fast. And for those who are busy with the billion finer points of running a business, keeping up can be a tall task – and I’m not talking Starbucks Tall. I’m talking 1,000+ stacked Starbucks Trenta cups tall.
As a seller, you either need to be ready to ride this seasonal revenue rollercoaster or get ready to kiss your profits goodbye.
That’s why we’ve squeezed every last bit of insight from eCommerce pro Dana Cariello to help you dominate on Amazon this holiday season with her insider tips. In this guide, you’ll discover exactly how to dodge Amazon’s holiday hazards and traps while maximizing sales.
Okay, now, let’s get down to business.
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Table of Contents
Dana Cariello is a Senior eCommerce and Product Development Manager at Fullmoon Digital, with over 5 years of experience working with major retailers. Included below are her insights on inventory management, operational shifts, competitive landscape, and more to help you cinch the 2023 season.
Inventory Management and Timing: Plan Ahead for FBA Inventory Deadlines (Oct. 26)
Amazon recommends third-party sellers using Fulfillment by Amazon (FBA) have holiday inventory in warehouses before the end of this month. (See Amazon’s FBA holiday readiness guide and checklist for sellers.) According to Cariello, this deadline is crucial:
“There is a high probability that any inventory that lands after October 26th may be subject to severe receiving delays, meaning a huge potential loss in revenue.”
To optimize inventory in preparation, Cariello suggests looking at historical sales data and allocating stock accordingly. Focus on your bestselling items first.
She also advises having backup inventory ready for restocking post-holiday spike. While receiving times vary at Amazon during peak season, having the restock poised helps guarantee you’re ready to backfill demand.
“If anything the crisis has taught us, it’s to be better prepared and have backup plans at the ready. The climate is consistently shifting, and those flexible enough to handle those pivots will land on top.”
The lingering issues from the global supply chain crisis put more pressure on sellers to get things right. Cariello points out sellers must strengthen vendor relationships and have contingency plans. Flexibility is key in our shifting climate!
Operational Shifts in November & December for Delivery Speed
In the holiday season, Amazon shifts focus from receiving seller shipments to fulfilling customer orders. This means more hands on deck for getting orders out quickly.
This eCommerce giant’s ability to meet customer expectations depends on orders going out on time each day. Cariello explained that fast fulfillment is “pivotal to delivery times” as “[Amazon has] set an unprecedented standard for delivery speeds customers expect during such a key time for gifting to loved ones.”
A major behind-the-scenes challenge Amazon faces when shifting its operational focus is that the retailer is required to deprioritize vital procedures. The downside results in delayed seller inventory updates and shipments.
“They lose their ability to efficiently check in new inventory shipments from sellers, thus the previously mentioned October deadline. Amazon is [otherwise] left with immense piles of awaiting shipments to be checked in.”
Sellers can expect long waits to get new inventory received and aggressive customer service inquiries, she advises.
Financial Planning and Understand Peak Fees
Higher fees start in October for sellers using FBA. Cariello recommends closely reviewing the updated holiday fee structure so you can account for the revenue impact.
“Fees constantly shift on the Amazon platform. […] It’s best to review the peak season fees from top to bottom to ensure a deep understanding of what is to come as well as see how they play into any discount strategies for the holiday.”
She forewarns sellers to triple check that products are in the right categories and dimensions are accurate, as even small mistakes can mean surprisingly high fees – especially during holiday pricing.
Removing any inactive inventory, as storage costs affect your seller score and overall account status, is something Cariello mentions, and that it’s prudent to evaluate your specific account needs and how fees are changing.
Capacity Management: Leverage Amazon’s Options
If you need more FBA capacity for holiday inventory, you can request an increase. But there’s no guarantee Amazon will approve it, so this possibility is one sellers should prepare for.
Cariello explains that available capacity fluctuates. Sellers bid on additional cubic feet by offering higher fees, offset by sales credits. She advises having a backup plan if you don’t get approved for more space.
So, how can sellers effectively use Amazon’s Capacity Management system?
“First, be aware that the maximum amount that a seller can request in a given storage type and period will vary based on available capacity within Amazon networks.
“Secondly, the Capacity limits for the upcoming month will be announced only in the third full week of each month via the Capacity Monitor in Amazon Seller Central as well as an email notification to the sellers themselves.
“Lastly, there are fees associated. The highest reservation fee per cubic foot offered by a seller is granted first, and fees are offset by what Amazon calls ‘performance credits’ from sales tied to the extra capacity given. These credits are designed to offset those initial fees. Meaning, the added capacity won’t cost sellers as long as they sell through that inventory.”
Prime Big Deal Days: Amazon Stretches Out Shopping Season
In 2022, Prime member deals were offered in October for the first time, and the anniversary round of Amazon Prime Early Access sale is coming up next Tuesday and Wednesday, Oct. 10-11. Cariello expects this to pull forward spending as other retailers follow suit with early discounts.
She sees it as both spreading demand and capturing sales sooner. Cariello noted self-gifting is on the rise (“who else doesn’t love a little ‘treat yo self’ moment?”), likely driving another October shopping spike.
Is this a strategy to disperse the shopping frenzy or to boost it? Her answer:
“A little of both. […] Spreading out the peak season allows for Amazon to cast a wider net for revenue while ensuring customers are getting what they want on time.”
The extra Prime event may dilute urgency around Black Friday itself. But Amazon will likely generate massive sales over the two-day October promotion.
“The urgency exists, but is less gnawing at consumers’ wallets.”
Competition Heats Up
Amazon, “a juggernaut in the online space,” maintains advantages in lower prices and faster shipping over rivals like Walmart. However, Cariello pointed out that in-store deals can still be worth the drive for some shoppers.
“I see more often than not that Amazon consistently has the cheaper product, with faster shipping times. What Amazon has yet to combat against Walmart is within physical retail spaces.”
When choosing sales channels between Amazon and others, she recommends evaluating visibility, fees, and ability to drive brand awareness. While championing for the idea of being on as many platforms as makes sense for your brand, Cariello cautions against spreading yourself too thin.
“A poor presence on the platform can sometimes be worse than not being available at all. Ensure time and care goes into every decision when expanding to other sales channels.”
For sellers, Amazon’s warehousing and distribution network remains unmatched in its reach and logistics speed. Cariello says FBA can save significantly on shipping expenses with proper planning.
Leveraging Amazon Warehousing and Distribution
Although there are seasonal interruptions, the benefits of using Amazon’s warehousing and distribution services are still clear:
“Speed, speed, and more speed.”
An ever-present goal, Amazon focal logistics are consistently evolving to offer at an unmatched tempo for arguably lower seller shipping costs. But taking advantage of this feature takes know-how.
“If sellers are wise to Amazon’s fees and plan accordingly, they can grow an incredible business on the platform. It’s very much learning how to play the game.”
Sellers that refine their navigation of FBA have a major advantage with the speed and reach of Amazon’s distribution network, allowing them to focus more on sales and marketing instead of inventory and shipping logistics. Not only that, but they’re spared the seller surge fees during the holiday rush.
“2023 is the second year Amazon has announced peak pricing for sellers in order to combat the ever increasing logistics costs Amazon used to absorb. Depending on the size of a seller’s business, it could be significant savings.”
Most shipping carriers and 3PLs charge more during the holidays. The elimination of peak surcharges is a major perk of FBA for sellers. Amazon had absorbed these extra costs in the past, but began passing some of the seasonal fees to sellers. However, FBA can still represent sizable savings compared to other fulfillment options.
TikTok’s Entry into Social Commerce
Cariello doesn’t believe the platform has fully leveraged its influencer power for direct shopping just yet. As she puts it,
“Most users have a ‘TikTok made me buy it’ mentality rather than ‘I bought it on TikTok’ when it comes to actual purchases.”
In Cariello’s view, TikTok’s community engages with influencer content in a different way than a marketplace shop.
“The platform shines on its influencer model, and I don’t see that viewing community reacting positively to aggressive ads. Sellers need to carefully consider how they position themselves.”
The lack of history and experience on this platform is inevitable, but TikTok is giving sellers a seasonal monetary break. Cariello sees challenges for sellers in their Shop’s recent launch, despite their discounted holiday seller fees. But she acknowledges the holiday opportunity given TikTok’s sway on spending.
“It may be worth the risk due to the powerhouse of influence that is TikTok,” Cariello concludes.
Maximizing Sales: Expert Tips for Sellers
To wrap up, Cariello gives us her top Amazon holiday selling strategies:
- Smartly segmented and targeted promotions across channels, including any follow ups or nudges throughout the season.
- Exclusive or limited-edition items for BFCM weekend.
- Clear customer communication on order deadlines and shipping cut off dates.
She stressed the importance of excellent customer service to handle increased sales, and readiness for said surge.
“For example, a limited edition good selling out within hours of launch. Some retailers prefer to have those one and done while others could have prepared for the opportunity of a pre-order. Bonus points if you can turnaround a restock in a short period of time to meet demand if a backorder is not feasible. ”
Cariello also advised having promotional visibility across every platform and channel.
“No channel should be underutilized. As much visibility as possible is pivotal to the holiday season.”
By learning from Amazon’s playbook and keeping these tips in mind, sellers can make this holiday season a success.
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The Final Bow on Crushing 2023 Holiday Sales
Well, if all those tips from the erudite Dana Cariello didn’t blow your mind, I’m not sure what will!
But truly, her insights make one thing crystal clear: With the right strategy, you can leverage Amazon’s vast year-end shopper demand while avoiding peak season pitfalls.
Get pumped up and prepared to play the Amazon holiday game at the highest level with Cariello’s pro tips guiding you to the winner’s circle of massive sales by:
- Optimizing inventory and making the 10/26 FBA deadline.
- Accounting for Amazon’s operational shifts impacting fulfillment speed.
- Carefully managing fees and securing additional capacity early.
- Running targeted promotions across channels to maximize reach.
- Providing excellent customer service and communication.
- Monitoring competitors like Walmart.
- Capitalizing on new platforms like TikTok.
The holiday season on Amazon may seem daunting, but when you think of it as a fun challenge like a high-stakes competition where you get to flex your eCommerce muscles, you can’t help but Smile from A to Z.
Let Cariello’s wisdom guide you as you navigate deals, deadlines, and consumer demand in Q4. Come out on top this holiday season and you may just find yourself feeling like an Amazon Pro, too.
Now get out there, be amazing, and let the Amazon holiday sales begin!
GIVE US MORE! (Holiday Insights)
- 2023 Trends in Consumer Packaged Goods
- Value-Oriented Holiday Shopping: The 2023 Retailer’s Map | Pt 1
- Value-Oriented Holiday Shopping: A Legend for Navigation Tech & Tactics | Pt 2
- The Grand Ballet of eCommerce: 7 Moves to Dance Around “Lying Flatism” This Holiday
- 0% Off: How to Flourish During the Holidays Using 6 Premier Brand “No-Sale” Strategies
- Lights, Camera, Influence! Dominate the Holiday Season with Influencer Marketing
- Gobbling Up Success: What Triumphant Holiday Influencer Marketing Looks Like in 2023
