Change is one constant for selling on Amazon and thanks to COVID-19, selling
on Amazon has been changing like never before. Now, more than ever, it’s vital that brands take the right steps during Q3 to ensure the brand is set up for success in Q4. In addition to the recommendations in the below article, it’s important to highlight the following updates Amazon announced on July 13:
“Inventory Performance Index” Threshold Change
Amazon has changed the IPI minimum threshold requirement from 400 to 500 in an effort to improve inventory management. This allows all products to have space available during the holiday shopping season. Beginning August 16, 2020, Sellers with an IPI below 500 will be subject to limits that will be in place through the end of the year.
The good news is that there’s time to improve your IPI by improving sell-through or reducing your excess and stranded inventory in the “Inventory Performance Dashboard.” One way to improve sell-through is by optimizing your listing. Need help with your listings and overall brand selling performance? Contact Buy Box Experts for a free Amazon listing analysis.
Quantity Limits
To maximize selection for customers during the peak, Amazon is rolling out ASIN-level quantity limits on products in FBA. Most products will have enough space available for over three months of sales. Sellers can view ASIN quantity limits on the “Restock Inventory” page and the “Restock Report.” Amazon will continually review these ASINs and, when possible, make adjustments to allow for more products.
Free Removals Promotion
Amazon is offering a free removal fee promotion for a limited time to help sellers avoid storage fees for products that have not been selling and create room for more productive inventory. Amazon will begin waiving fees for any removal order submitted to inventory in fulfillment centers on July 14, 2020.
How to Use Q3 to Have an Outstanding Q4
Most Amazon sellers expect Q4 to magically boost their sales. And, why wouldn’t they? Given the evidence, the fourth quarter can bring in massive sales increases, sometimes as much as 90 percent! Yet many brand leaders end up missing out on the full potential of the holiday rush.
Why?
The answer is simple: Q3. The third quarter gives sellers time to increase their organic rank, improve conversion rates, and achieve a higher sales velocity. It also allows sellers to update content on their A+ detail pages and Brand Stores, optimize FBA inventory strategies and ensure they have resources to manage customer service as well as being prepared for the unexpected bump in the road which can often happen with selling on Amazon. When all of this is in place, sellers can dominate Q4.
Use Q3 to Clean House
During my time at Amazon, I quickly learned that Q3 was make-or-break for sellers, and it should be treated as spring cleaning for a brand’s listings. Identify what’s driving potential customers away. Got negative reviews? Start doing some damage control: amp up customer service, respond to disgruntled buyers, and clear up any misunderstandings about the product.
It’s not just about identifying what drives customers away—it’s about also finding out why target customers aren’t making it to the listing in the first place. Optimize SEO. Make sure all content has relevant, high-performing, top-ranking keywords to draw the target audience in.
Not sure where to begin cleaning up a listing? Our team at Buy Box Experts would love to help with our free Amazon listing analysis. We’ll review your listings and walk you through each step of the way to show you exactly what you need to do to fix your listing.
Don’t Cheat! Play the Game Right and Win
Many sellers believe they can “cheat the system” by reserving all of their advertising budget for Q4. Unfortunately, this strategy yields a high amount of wasteful spend because Amazon doesn’t allow sellers to make dramatic changes to spend (up or down) quickly.
A brand then needs to start advertising in Q3 if they hope to see greater gains during Q4. At Buy Box Experts, we recommend ramping up the budget three weeks to a month before Q4. That way, the brand will be able to gradually increase ad spend and naturally increase sales velocity.
A high sales velocity tells the Amazon algorithm that the brand is doing something right. In return, the brand will be rewarded with more sponsored product spots, a higher organic ranking, and a cheaper CPC—and with that kind of success, the brand will be set up for Q4.
It’s also good to run an ad audit during Q3 to make sure all advertising is all in order. If a brand can’t do it themselves, Buy Box Experts can do it for them for free with our Amazon advertising audit.
Keep an Eye on Keywords
Pushing advertising during Q3 gives brands another bonus; a brand can more easily determine which keywords are driving the most sales and plan accordingly for Q4. The top-performing keywords are more likely to experience a jump in search volume during the holiday, so other competitors will also try to cash in on them.
If a brand isn’t sure what keywords to use, we offer the top 1,000 keywords for any brand’s category. In that keyword report, we’ll rank them and show the top-ranking products in a category and what they’re indexing for. To get access to this report, just sign up for a free listing analysis.
Stock Up Early
Being “sold out” isn’t a popular status symbol. It’s a sign of poor preparation, especially in Q4.
When a brand is sold out, they lose the buy box and miss crucial sales days. Running out of inventory can also slow the momentum of a seller’s BSR (best-seller rank). For instance, if a brand averaging $10k per month on “X” amount of ad spend runs out of stock, they could still spend the same amount of ad spend once they have inventory again and only average $7k a month. That’s 30 percent of their sales gone! Unfortunately, many sellers make this mistake, but it’s easy to avoid by preparing stock during Q3.
How To Determine How Much Stock Is Needed for Q4: A brand should review and compare Q4 sales from the previous three years along with the current year’s sales’ trends. A brand can also use Google Trends to help them determine annual spikes in sales. For instance, if a product’s sales typically start to spike in November, the brand can order inventory ahead of time in September.
Ordering stock early helps manufacturers meet supply and demand and keep on schedule to prevent inventory shortage. It’s a win for all parties involved, including manufacturers, sellers, and customers!
How Will COVID-19 Affect Q4?
Many brands are worried about a second wave of COVID-19 affecting their Q4 sales. While no one can be sure what the future holds, it’s good to have a Q4 backup plan.
The last wave of COVID-19 forced Amazon to prioritize products considered “essential.” This greatly delayed the shipping and delivery times of other products deemed “nonessential.”
Besides preparing for shipping delays, there are other ways to counter the effects of COVID-19. This webinar covers some of those ways: Amazon Growth Opportunities After COVID-19.
Prepare Now to Win Later
Prepping now brings prosperity later. Buy Box Experts can provide even more help with our free listing analysis. We help brands make sure their entire listing is optimized for maximum search and conversion performance, so they’re ready to take on Q4. Click below to get a free listing analysis for yourself!
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