Fourth quarter is upon us and that means: sales, sales, sales. $35 billion worth of sales? That’s how much was spent last year in Q4 on Amazon alone. Given current events, e-commerce has exploded and this holiday season shows no signs of slowing.
Wondering how you can maximize that Q4 sales bump? Stay tuned.
Tip #1 – Prepare Financially
Sales will come and that means you’ll need cash to stock up on inventory. If you don’t have money in the bank, Todd recommends taking out SBA loans. These loans are great if you’ve got an established business because of the low interest rates. You can also get a line of credit from your bank. Or check out Amazon Lending loans. These loans have higher interest rates but if you’re turning a profit you should easily flip that money 3, 4, or 5 times over. Also consider PayPal loans or Payability, an app that taps into your Amazon account and sends you money based on your disbursements. Credit cards should be your last resort.
One thing to note, before borrowing money, it’s important to know your numbers. So hire an accountant or use software systems like Quickbooks for information on your daily profit levels.
Tip #2 – Stock Up
Given the unique time that is Q4, double (at the very least) your normal inventory orders. Use RestockPro to track sales velocity and get reorder reports so you can estimate how much you’ll need. Tools like Keepa and Jungle Scout Sales Estimator are also helpful when trying to figure out product orders. Just remember that Amazon is limiting how much you can store in their warehouse. Use your own warehouse or 3PL companies like ShipMonk. You can also call your prep center to work out a deal.
Tip #3 – Keep An Eye On Storage Fees
Tip #4 – Keep Your IPI Score Above 500
There are a few ways to keep inventory levels healthy (or at least boost your score). First, clearance out products by slashing prices using Amazon’s discount option. You can also use the Listing Quality Dashboard to improve listings. Another tip – if you have products going out of stock, go into your account and delete those listings manually.
Tip #5 – Have A Five Cent Auto Campaign Running
For (basically) free sales in Q4, add all of your products to an auto campaign with a bid of 5 cents and a $50-$100 budget. Your campaigns only show up when you win the buy box so don’t worry about accidentally helping other sellers. The more cheap clicks you can send to your products, the more sales you’ll receive.
Tip #6 – Ship Inventory Early & Often
Assume Amazon will take 2-4 weeks to receive your shipments. Make sure there’s a healthy buffer. And remember that November 1st is the last date to send in products for Black Friday and Cyber Monday.
Tip #7 – Prepare For Returns
A season of giving means a season of returns. Along with boosts in sales, you’ll see boosts in feedback, both negative and positive. So prepare yourself mentally.
Tip #8 – Rethink Rankings
If you’re looking for new products in Q4, don’t take sales rankings at face value. Rankings are often skewed by the holiday spike so check out Keepa for that historical product analysis before buying.
Tip #9 – Don’t Forget January
While it’s not technically Q4, remember that sales also rise post-Holiday season. It varies by category, but remember to stock up for the first few weeks of Q1 to avoid missing out on more stellar sales.
Use these nine tips to maximize your Holiday season by maxing out on Q4 sales. Don’t forget to leave a review where you’re listening and sign up for Todd’s upcoming Mine & Refine Masterclass.
As always, happy selling everybody.
Resources From This Episode
- SBA loans
- Amazon Lending loans
- PayPal loans
- Keepa Data Package
- Jungle Scout Sales Estimator
- Jungle Scout
- EA30 Amazon FBA Advertising PPC for Wholesale Sellers
- Amazon Wholesale Mine & Refine Master Class
Outline Of This Episode
[00:34] Todd’s introduction to this episode
[02:19] How to get your finances in order
[08:20] Why you should stock up
[12:35] How to monitor storage fees
[14:43] How to boost your IPI score
[17:48] The importance of auto ad campaigns
[19:50] Why you should ship early & often
[21:28] How to mentally prepare
[22:46] Why you should rethink rankings
[24:49] Don’t forget January
[26:38] Todd’s closing thoughts on this episode
$35 billion sold last year on Amazon in Q4. Make sure you stay tuned for these nine tips on how you can take advantage of Q4, sell more and make more money. Let’s go
Welcome fellow entrepreneurs to the Amazon Seller School podcast, where we talk about Amazon wholesale and how you can use it to build an eCommerce empire, a side hustle or anything in between. And now your host Todd Welch
What’s going on everybody. Welcome to episode 40 of the Amazon Seller School podcast. I’m your host Todd Welch. And we are getting very close to Q4 right now as I’m recording this, it’s the beginning of September and Q4 is October, November and December. That is the timeframe where, especially in the United States and a lot of other places around the world, we have a lot of holidays and there is a lot of holiday shopping in this season that people are going to do. 35 point 13 billion was spent last year during Q4, just on Amazon alone. And this year looks to be even bigger because sales in e-commerce have exploded. My sales are up 203% from this time last year, and Amazon is booming. They’ve almost doubled what they’re selling since this time last year. So it is going crazy on Amazon and you need to make sure that you’re prepared.
So that is why we’re going to be doing nine tips that you can do right now to prepare for Q4 and make sure you’re maximizing your sales, maximizing your profit and making as much money as you possibly can and taking advantage of Q4 on Amazon this year.
Alright, so if you want the show notes for this episode, remember to head on over to entrepreneuadventure.com/40, and without further ado, let’s go ahead and dive right into these. Tip number one, prepare financially, sales are going to increase for you without really doing anything between 30 to 200%, depending on the categories that you’re in. Of course, categories like toys are going to be higher than categories like home and garden, but every category on Amazon sees a lift in Q4 for the most part. So you need to be prepared financially for this. Now, if you’re like most sellers, you’re probably utilizing all of your money.
Every time you get that disbursement from Amazon, maybe you pay yourself a little bit and the rest goes right back into inventory.So you’re probably kept with the amount of money that you have just sitting in your bank account. So now is the time to start looking at things like a line of credit from your bank. If you can possibly get a line of credit, that is going to be one of the most ideal routes, because it’s going to have a lower interest rate, like at six or 7% right now. And you can take that money out and usually only have to pay interest on that every month. So you can take money out and pay a small percent or a small amount right now until after Q4, when you start collecting all of that income that you’ve made and all that profit that you’ve made, assuming you have your ROI and your profit and all of your expenses in check. Line of credit, definitely one of the best ones out there, SBA loans, small business administration.
If you’re in the U S they have loans that are backed by the government. So they also have very low interest rates, but again, you need to have an established business usually to be able to take advantage of these loans. So if you’ve been in this for a couple years or more, and you’ve actually made money last year, look into an SBA loan as well, because you can get 10, 15 year loans. They’re at a relatively low interest rate, maybe six, seven, eight, 9% interest on that. And once Q4 is done and you start winding down into next year, you can pay those loans off right away. If you’d like and not have to pay that interest. Now, if you do not have a history in your business and were not profitable at last year, you’re going to have to look at alternative options.
And some of the options that I have used in the past are Amazon lending loans, which have really shrunk back. They’re not offering those quite as much, but if you have those they’ll show up on your homepage in seller central, and you’ll be able to get access to those, you can also believe go to programs and then lending. And if lending is there, you may have an offer that’s available. Now the interest rate on those typically are going to be around 18% or 16% annually, which sounds like a lot. It’s a little bit lower than a lot of credit cards out there. But if you keep in mind that you’re going to be able to hopefully flip that money, three, four, five times in the period that it takes payback, you will most likely make well, you definitely should make a lot more than that.
16 or 18% interest that you’re going to be paying. Now, before I go any further, I want to make sure that you understand before you start taking any money, make sure you know your numbers. So if you’re not doing your accounting in an accounting software like QuickBooks and zero, or hopefully you have some kind of a bookkeeper, who’s giving you monthly reports. So you know exactly how much you’re making, and then also using a program like seller board or something else that allows you to see your daily profit levels as well. You’re not going to be wanting to take these loans. You have to know your numbers first. That is number one. So if you don’t figure that out first, before you start taking loans, it’s the number one way to get in trouble in e-commerce or really any business is taking loans and just praying that you’re making money.
You need to know 100% that you’re making money. All right. So assuming that this applies to you, then taking these loans. Another Route is payability. Payability will actually tap right into your Amazon account and give you so much money based off of your disbursements. So instead of having to wait the two weeks to get your disbursement, you can get them upfront, but they are going to take a fee as well from that percentage whatever the percentage is currently, I believe it’s like two or 3% of that disbursement amount, which can really add up, but it can help you with cash flow. Another route that I’ve taken before is a PayPal loans through loan, builder.com. I’ve gotten loans through them. Again, it’s going to be a higher interest rate with them. They actually charge the full percentage upfront, and then you pay that off weekly as you go along.
So again, you can really get into trouble by taking these loans that you have to pay back quickly or at the higher interest rate. So just make sure you know, your numbers and last, but not least would be a credit card. It’s never a really good idea to carry over a credit card, especially one that’s at like 19, 20, 21% interest. But as a last resort, that is an option. Personally. I always pay off my credit card every month. I use our credit card as much as possible because I’m getting a 2% cash back and I’m using the capital one spark business card to get that. So those are your options to prepare financially if you don’t have the money in the bank,
because tip number two is going to be stock up on your inventory and over forecast what you think you’re going to need.
When I say stock up, I’m talking about probably at least double what you’re used to carrying possibly even triples, depending on how many days of inventory you’re currently keeping. Now, I use restock pro to track my sales velocity and get reorder reports so that I know how much I need to order. And I can put numbers there. Like if I want to carry 30 days, 60 days or 90 days or longer, whatever you choose, I can put the lead time in there, which is the amount of time that it takes for the product to get to my warehouse and then get into Amazon. So all of that stuff is being tracked. So make sure you’re using something like that Forcastly is another really good software out there for forecasting, the sales that you’re going to have. Now, all the software is based off of your historical sales.
So if you don’t or are not using one, currently get using one right away. So it can start getting that information and you can have better forecasting, but regardless, whatever you’ve been ordering, however, you’ve been forecasting your sales. I would at least double it. Now, previously I was doing 30 days on a lot of my inventory, a rolling 30 days of inventory. I extended that out to 60 days in August and am going to probably extend that out to even 90 days on a lot of my products, it’s gonna depend on the product and I will base it off of that, of how much I think I’m going to sell in Q four. And a good way to kind of determine for your products is to look at the keepa graph. So on keepa, if you pay for the data package, you can look at that green line historically and look at how good a product did last year.
How much better was the sales rank last year compared to this year, and then use a tool like a jungle Scouts, sales estimator, which is a free tool. You can punch a sales rank in there and a category. And it’ll tell you an estimation of how many that product was selling per day or per month last year for that sales rank. So you’re definitely gonna want to stock up. So that’s tip number two, stock up and probably overstock what you are thinking you’re going to need so that you’re not running out of stock. Now, another thing we need to remember for stocking up is that Amazon is going to be limiting the amount of stock we can send in, right? We’ve got that limit on overall what each one of us can send in, especially if your IPI score your inventory performance index score was below 500, which we’re going to talk about more here in tip four, but regardless we all have limits on our, each ASIN is going to have a limit.
So you may have to have a warehouse and be storing product in your warehouse that you can’t direct ship from the brand or from the distributor to Amazon so that you can stream that inventory in as fast as possible. You may even be able to get a storage unit if you don’t have a warehouse, just make sure that whatever’s in that storage unit is not going to have issues in the heat of a storage unit, or you can utilize a three PL third party logistics company that’s out there like ship monk or something like that. Alternately, you could talk to your prep center. If you’re utilizing a prep center to see if you can store your inventory in your prep center from them. Now, a lot of prep centers do not usually allow a lot of storage, but they’ve been increasing their ability to store with COVID and everything going on.
It’s just been a necessity. So a lot of them have been doing that. So make sure if you’re using a prep center to talk to them and see if they can help you out there, tip number three, keep an eye on your storage fees. Now we’re all used to having and keeping an eye out for the big 12 month storage fee that we get. If you have products in Amazon for more than 12 months, the storage fee really goes up and you get charged a lot for that. But you may not be aware that in November, in December, the storage fees for everything go up significantly. So we’re talking about stocking up your inventory, which is definitely something that you have to do, but keep in mind that November, December the storage fees are a lot higher per cubic foot. So your storage fee, your storage bill is going to go up significantly.
So you’re going to want to be making sure that you don’t have a lot of inventory just sitting around in there for long periods of time. We want to stock up and make sure we’re not running out of stock, but at the same time, moving that product as fast as possible. So we don’t want that product just sitting there in Amazon. So you’re going to want to keep it track and make sure that it’s competitive. Make sure you’re using a repricer, like be cool or hour out or seller snap, and keeping that product in the buy box so that your sales are moving and your inventory is not just sitting there, but you must at least be aware that your storage fees are going to be significantly higher for November and December. So just keep that in mind, Amazon does this because they know people are going to be sending in a ton of product and they want to kind of STEM that tide a little bit so that their warehouses are not getting overrun.
And with COVID, the warehouses are already overruns. It’s going to be a very interesting time in November, December Q4 in general, as Amazon tries to work through all the congestion that they’ve been dealing with. So watch out for those storage fees during Q4.
Tip number four, keep your IPI score. The inventory performance index above 500. Now they already had one evaluation here in August, and they’re going to have another one on September 21st. So you want to make sure that your score is above 500 and your score is based off of staying in stock on popular products. So if you have popular products that are out of stock, that’s going to strike against your score, keeping your inventory levels healthy so that you don’t have a bunch of product that has been in sitting in Amazon for a long time and has not been selling. So if you have product that’s not been selling, you’re going to want to start clearancing that out, get your score up.
Maybe you’re used some coupons, use some discounting. Take advantage of that discounting in your price. So if you go into your price settings, you can set a sale in there. And that shows up as a sale on Amazon. And customers really liked that. So that can help you move some product. If you need to get rid of product, that’s been sitting in there for too long. Another one that I’ve heard that can go into your IPI score is fixing your product listings. So if you have products that have issues. So if you go into that suppressed listings report, you can see recommended things that Amazon recommends that you fix. So go into your listing quality dashboard, which is again, under inventory, managing inventory. And then it’s one of the links that’s underneath their listing quality dashboard gives you lots of options of things that Amazon wants you to fix on the listings.
And I’ve heard that plays into your IPI score as well, but the biggest ones are definitely your inventory levels, keeping those healthy. So you don’t have products sitting in there for a long time. So clearance out any inventory that you need to get rid of and then out of stock products. So if you have products that are out of stock and you’re not going to be restocking, make sure you’re deleting those listings. If you are going to be restocking them, what you can do is you can go into the IPI score, delete that product from the recommendations that it’s saying in there, and then close that listing. And then it is not taken into the IPI score. Supposedly, you know, we’re all trying to figure this out. It’s an algorithm, but those are the main things that can help get your IPI score above 500.
If it’s not already, you’re definitely going to want to have that above 500 before September 21st, or your ability to send in stock will be severely limited for Q4. And you definitely do not want that.
Tip Number five, have your 5 cent auto advertising campaign running , Now we talked about, the 5 cent auto campaign and different things that can do with advertising with Bernard over at PPC Maestro back in episode 30. So you can check that out, amazonseller.school/30, to check out that episode and learn how to set up this campaign. But the basics of it is that you’re just going to add all of your products, every product that you have into an auto campaign with a bid of 5 cents and maybe like a $50 budget or a hundred dollar budget. And the reason for this is then you get really cheap advertising and really cheap sales.
And during Q4 sales increase, so people clicking on ads increased and more people are going to be running out of advertising budget, which means that your 5 cent auto campaign is going to get more impressions. And you’re going to get more cheap clicks and probably more sales to your products. Now, when you’re running advertising, the click only goes to you when you’re in the buy box. So a lot of people worry about that, that they’re going to be helping other people, but when the advertisement shows it only shows when you are going to get the buy box for that product. So it’s basically like free sales, these 5 cent auto campaigns. So just for an example, in my 5 cent auto campaign, I have spent $663 and 99 cents and have made $17,397 and 21 cents in sales. That’s a 3.82% advertising cost of sale. So for every sale, I’m only spending 3.82%.
So it’s like free sales. It’s a no brainer to have this set up and it’s going to be even more effective during Q4 as more people run out of their advertising budgets faster because of the increased traffic on Amazon.
Tip number six, assume Amazon will take two to four weeks to receive in your shipments. And remember that November 1st is the last day to get stock to Amazon for black Friday and cyber Monday. So you’re going to want to ship your inventory in soon and often early and often, as they say, get your products in there ahead of time, especially before November, but expect that the time that it takes them to get received is going to be increasing. So like I mentioned with restock pro, I have that lead time. So for Q4, I’m going to be boosting out that lead time, adding in at least a week, if not two weeks, addition to what I’ve been normally doing so that I can make sure that I am calculating that into how much product and how much stock I want to have in there into Amazon.
So make sure you’re keeping that in mind, it’s going to take longer. It could take even longer than that. I had a pallet of $10,000 worth of inventory sit on Amazon’s docks for two months in August before they received it in, I believe it got into their warehouse, the end of may and did not get received in until August. So if that was happening in the summer, just imagine what could happen here in Q four. So keep that in mind when you’re looking at sending in your inventory do not wait till the last minute.
Tip number seven, be mentally prepared for returns and positive and negative feedback. So whatever you’re used to getting for returns, it’s gonna double, triple, quadruple, or more just like your sales are going to, you’re going to get a lot of returns back, probably even more than that, because a lot of people are buying as gifts.
And what happens if you give someone a gift and they don’t like it, they are going to return it, or you’re going to return it. So you’re going to have a big increase in returns. So just be mentally prepared for that. And don’t be surprised for that. When in January, all of a sudden your stranded inventory is filling up with products that people returned, just be prepared for that. Same thing with positive and negative feedback. You’re going to get a lot more positive and negative feedback and a lot more reviews, positive and negative on the products that you’re selling as well. So just be mentally prepared for that know that it’s going to happen so that you’re not freaking out when you see all these returns and maybe a bunch of negative feedbacks and things like that.
Tip number eight, look at sales ranks differently when you’re sourcing.
So if you are looking for new products to start carrying during Q4, especially November and December, remember when you’re looking at that, keep a graph. And you’re looking at the sales rank that the sales rank are going to be all out of whack during Q4. They’re usually going to be a lot lower. So don’t be looking at a product and seeing that it’s a 10,000 sales rank right now and being like Holy cow, I’m going to be able to sell 500 of these every single month. And then January, February, March comes sales drop off, and now you’re stuck with a bunch of inventory. So keep that in mind, when you’re looking at new products to start carrying that the sales ranking Q4 are going to be out of whack. Hopefully the product that you are looking at is going to have a history. So you can look at that keepa graph.
If you do not have keepa the data package for kipa already, make sure you head on over to the show notes of this episode, Amazon Seller School.com/40 click on that to get the keepa data package. That is an affiliate link. So I’ll get a small cut of that at no additional cost to you. And I would really appreciate it. Or you can simply go to amazonseller.school/kipa. And that will take you right there to buy the data package. You definitely need that. If you’re going to be selling on Amazon, your sourcing, you absolutely need the data package. So you can see the historical sales rank, the historical price, the number of sellers, the reviews and everything else. It’s one of those critical things that everyone has to have. And if you don’t already have the keepa plugin, you can get that at amazonseller.school/ kipa-EXT to download the keepa plugin that will allow you to see these graphs that we’re talking about.
All right, and last, but definitely not least tip number nine, do not forget January. What January you might be thinking. What are you talking about? We’re talking about Q4. That is October, November, and December. Why are you talking about January? Because January is an extension of Q4. The sales do not just magically all of a sudden die off after Christmas. They do for maybe a week or two, but what happens after Christmas people return products and they want to spend gift cards. So January gets a really big boost just like November and December. January is basically an extension of Q4 and you can expect a lot more sales than normal in January. Usually throughout the first three, maybe even four weeks of January, you’re going to see an increased growth of sales versus what you’ll typically see in February or March. Now, it all depends on your product, right?
I have some products that are for summer and for boats. And so people are starting to get ready for boating in February and March. So those really pick up. So it does depend on the products but just keep it that in mind, that January is an extension of Q4. You’re going to see a lot of extra sales in January, just like you do November and December. So don’t miss out on those. Keep your stock up all the way through November. So you’re not missing out on all those sales.
So there you go. The top nine tips for preparing Q4 selling on Amazon as a wholesale seller. I hope you liked that if you did make sure you give us a like and a thumbs up or leave us a five star review over there on Apple iTunes or wherever you’re listening to this podcast, I would really appreciate it for all the show notes and to look over these tips in text, head on over to Amazon Seller School.com/ 40.
And also right after this is going to be released. You’re going to have another day or two to get signed up for the Amazon wholesale mine and refined master class that we’re going to be doing. So make sure you head on over to Amazon Seller School.com/mine M I N E to find out more about that, but essentially, I’m going to be showing you how to find gold on Amazon. Find listings that are collecting dust, Polish them up, make them look nice and double, triple, quadruple the sales and get 7500% ROI on these products. And a lot of times have them all to yourself for quite a long time. So definitely check that out. You will not want to miss it. amazonseller.school/mine, M I N E. And you can check that out. It’s a paid master class, but it’s only $27 right now after we do the live and the recordings are going to be $47. And for joining us live, you get the live where you can ask questions. Plus you get the recordings afterwards as well. So definitely head on over entrepreneur venture.com/mine to check that out. And with that, this is Todd Welch signing off happy selling everybody and have an awesome Q4.
This has been another episode of the Amazon Seller School podcast. Thanks for listening fellow entrepreneur and always remember success is yours. If you take it.