The following is a guest post by Run AMZ.
The Holiday season often brings the largest demand of the year for many sellers on Amazon. This shared demand increase in Q4 sends shock waves through the Amazon supply chain. Managing inventory and shipping during this time can prove complex and challenging to even the most seasoned brands, and with the added difficulties in supply chains over the last 18 months it’s more critical than ever to have a well-planned logistics strategy in place.
Staying current with Amazon policies and key dates for Holiday selling is a challenging and complex task, so many brands turn to a trusted agency partner to provide the expertise needed to navigate this season and ensure success. At Run AMZ, we have dedicated experts with years of experience continually focused on our brands’ logistics strategies, and today they are sharing their logistics best practices for Q4 on Amazon.
Forecast and Set Your Stocking Policies
If you don’t already have a Holiday forecast in place, we recommend forming and maintaining one as soon as possible. Each year we encourage our brands to collaborate with the necessary internal and external partners 6-12 months ahead of the holiday season to determine goals and inventory needs on Amazon and bring in product accordingly.
In order to keep inventory at healthy levels closer to Q4, Run AMZ provides their partners with rolling long-range forecasts driven by Amazon’s current stocking policies. This forecast gives input for manufacturing, and the stocking policies also help to provide an immediate flow of inventory into Amazon. This information is critical to a successful Holiday selling season for every brand.
Manage to KPI’s For Increased Available Supply
One of the key elements of maximizing sales during the Holiday season is to ensure you’re not dealing with out-of-stocks on your top sellers. Going into Q4, it’s important for sellers to have earned an appropriate stock limit in order to meet the true customer demand on their products. In order to do this, it’s imperative sellers manage the key performance indicators Amazon has set up in order to increase their supply limits.
In July of 2020, Amazon started limiting the quantities a seller could stock in FBA at the ASIN level. Then in April of 2021, Amazon shifted from ASIN level stocking limits to account level Restock and Storage Volume Limits. These limits are designed to allocate limited Amazon warehouse space to the sellers hitting performance metrics that make the Amazon Fulfillment Network more efficient.
The limits are defined as follows:
- *Restock limit: The quantity of units a seller is allowed to store in Amazon’s fulfillment network. This is driven by a rolling 90-day sell through rate.
- *Storage Volume limit: Cubic feet a seller is allowed to store in Amazon’s fulfillment network. It is driven by a seller's Inventory Performance Index (IPI) score during prior check points in the year.
A sellers’ Inventory Performance Index (IPI) score is calculated through certain Key Performance Indicators (KPI’s) listed below. Scoring “good” or “excellent” in all KPIs will lead to a preferred IPI score and allow higher inventory limits for your brand during holiday and beyond.
The KPI’s impacting IPI are as follows:
This grid provides tips and best practices for how to improve your brands’ performance on these critical KPI’s.
Hit Key FBA Delivery Dates for 2021 Holiday Selling
The following are important FBA inventory cut-off dates for sellers on Amazon. Your inventory should arrive at fulfillment centers no later than the dates below to ensure your products are available to customers during peak selling season.
- *Black Friday and Cyber Monday: Inventory should be to Amazon FC by November 15
- *Christmas: Inventory should be to Amazon FC by December 11
Even in this challenging supply chain environment, with the right focus, planning and expertise, your brand can have a successful holiday selling season this year. If your company is looking for extra support during Q4 and beyond, reach out to our team at Run AMZ. Helping brands achieve success on Amazon is our passion and we’d love to learn more about you and your business.
About the Author:
Run AMZ is a full-service Amazon agency consisting of former Amazonians and E-commerce experts. Our goal is to understand and convey your unique brand story to maximize your sales and profit on the Amazon platform. As your strategic partner, we use data insights, elevated creative content, marketing and logistics planning to help you win the digital shelf.