Three Strategies Sellers Can Implement Now on Amazon to Prepare for the Holidays

August 3, 2022
by SPINS Marketing


The holiday season on Amazon can be a stressful but lucrative time for sellers. Aside from the anticipated sales surge, the pandemic has changed holiday shopping forever, with increasingly more people comfortable with shopping online for gifts. According to Amazon, sellers sold an average of 11,500 products per minute between Black Friday and Christmas last year. It is imperative sellers avoid the obvious issues, like shipping delays, and the not so obvious, like miscalculating expected inventory levels, to navigate the magnitude of sales that occurs during this lucrative period.

There’s no time like the present to start preparing early to ensure your online business is in top shape by the time the holidays roll around. Here are three strategies that businesses can implement now on Amazon:

  • Increase Inventory Levels Utilizing Velocity Forecasts
  • Clean Up Duplicate Listings and Refresh Your Content
  • Run COGS/Price Analysis and Determine Strategies for Discounts

1. Increase Inventory Levels

Having the appropriate inventory levels for the holiday season is a given. Sellers should have enough supply to meet demand.  Increased velocity – meaning the rate of products flying off the digital shelves—is going to be higher. Bottom line, you do not want to run out of items when customers are ready to buy.

At any given time, industry best practices advise sellers to have 45-60 days’ worth of inventory on hand, but during the holidays, that number is increased to 90 days. Though it is not guaranteed that you will sell more during the holiday period, you don’t want to be caught flat footed.

Generally, Amazon is proactive in alerting if inventory is dropping or if you are overstocked. Seller Central allows businesses to check their inventory dashboard to see which SKU needs to be replenished or which SKU has been in excess of 90 days and over. As an Amazon seller, one of the worst things you could do is not have enough inventory on hand for the holiday season. If a customer is searching for your product but you’re out of stock, they would simply buy a competitor’s product. Therefore, it is important to have enough inventory on hand for the holiday season.

To forecast inventory needed for the holiday season, many sellers use the velocity analysis modeled by Amazon. In a perfect scenario, this figure is fine to use as it will be able to accurately predict how many products you would need to have 90 days’ worth of inventory. However, unpredictable circumstances can occur in day-to-day business and could cause the calculated velocity figure to differ from a more accurate number.

For example, take a scenario where you typically sell 30 razors a day but a few months ago, you suffered a temporary recall on faulty products, thus affecting velocity and sales. During this period, you could only sell 10 razors per day. This is a one-off event that dented velocity. If this event had not happened, your velocity figure could be considerably higher. However, the algorithm used to calculate velocity does not account for anomalies like these. If you use the traditional velocity figure to base your calculations for the holiday period, you may be underestimating the amount of assortment needed to stay in-stock.

In addition, products that are seasonal in nature also require extra consideration. This could be products that are weather-dependent like an outdoor inflatable pool which is typically bought in the months leading up to summer, or Vitamin D supplements which are typically bought during winter when there is a sunshine deficit.

How to ensure you have the inventory needed

Sellers must view the entire landscape and make allowances for any issues that may have affected velocity. Moreover, you should use historical data and account for the cyclical nature of sales when thinking about velocity. Unlike a rigid algorithm, you can use these numbers to better predict the amount of stock you would need for the holiday season. Additionally, when you create your forecast, you should also account for coupons, discounts, and search term frequency increases related to your products. This is especially important if your product is frequently purchased with high velocity holiday type items.

Another important tip is to ensure that your warehouse bakes in elevated ship times to Amazon fulfillment centers. In anticipation for the holiday season, allot extra time for shipment processing and check-in. As businesses begin to ship higher levels of inventory, it could take Amazon up to 30 days to process your orders versus the usual 7 days.

2. Cleaning Up Duplicate Listings and Refreshing Your Content

Gear up for the holiday season with a general “house-cleaning.” Often, as day-to-day business issues pile up, businesses lose track of how their product listings appear on Amazon. Now is the best time to do an audit and ensure all your products have individual listings and that the content is retail-ready. Additionally, all duplicate listings need to be minimized or eliminated.

What is a duplicate listing?

A duplicate listing is an instance where the exact same product may have more than one listing on the website. This can occur when the same product has 2 different UPCs because of a slight ingredient change. Another instance is when there are rogue listings where third-party sellers create another listing for the exact same product, so they do not have to compete for the buy box with others. Having multiple listings could confuse customers and turn them away from purchasing your products, or in the case of rogue listings, you may unfairly lose sales to third party sellers.

To merge multiple listings, you can remove old listings that are no longer relevant through your dashboard. In the case of rogue listings, you can create a case on Amazon to request to merge listings.

Why does content need to be refreshed?

When product detail pages are missing content, Amazon can suppress your listings, meaning it does not show up as readily when customers are searching on the platform. This can occur when your product page is missing information like ‘material feature’ or it could have measurements listed in ounces when it should be in fluid ounces for that specific product. Making sure that your catalog and detail pages are optimized is key to ensuring that your products show up in search and has all the information needed for customers to make their purchasing decisions.

To begin optimizing your catalog, download your suppressed listings report to view consolidated issues with your products so that you can correct them. Typically, sellers find this process tedious thus prompting many brands to seek channel management services that offer them help with managing their extensive catalogs so that they can rest easy, knowing that their listings are optimized for sales.

3. Running COGS/Price Analysis and Determining Strategies for Discounts

Knowing your margins is a key part of being able to succeed on Amazon. Businesses must be aware of their Cost of Goods (COGS) and how much they are paying to Amazon (selling fee, referral fee, fulfillment fee etc.) to determine the price point at which they can make a profit.

Knowing your breakeven figure will help to factor in the appropriate discount pricing; as in how much of a hit to profits are you willing to take? Of course, promotions occur year-round but tend to be steeper during events and holidays. Moreover, promotions can also speed up velocity which, in turn, affects inventory forecasting. Sellers must consider how much profit they are willing to give up, and if inventory can handle the expected velocity increases.

As consumers flock to the website to score on deals, promotions also serve to introduce new customers to your brand. Essentially, sellers are taking a loss upfront for future gains, hopefully allowing the brand to scale profit in the future. For example, a company that sells shaving products could sell a razor system for a discount and, in the future, rely on repeat customers to buy blade cartridge refills from the brand specifically. The holiday season is also a good time to launch promotions on any overstocked product or those with looming expiration dates. This allows a seller to recoup some of their potential losses rather than liquidate.

The takeaway: Start thinking of your pricing and shipping strategy now.

Succeeding On Amazon During The Holiday Season

There are multiple strategies one can use to gain traction on Amazon. However, the course can seem daunting to many businesses, even for the most acclimated.

Many brands choose to utilize channel management services to help read the map and navigate the road to success. From inventory planning for the holidays to gaining category data for your own hands-on analysis or simply outsourcing the entire Amazon side of the business, there is a level of dedicated Amazon experts to manage your every need. To learn more about how we can help your business grow on Amazon, contact us below.