Now that Walmart+ Week is over and Amazon’s Prime Day has passed, it’s a good time to look back at your inventory and operations and ask yourself: are we ready to handle Q4? Based on how your team and orders flowed during this year’s “Marketplace Sweeps” (as we’ve decided to call it), one thing is for sure, the peak holiday sales season is right around the corner! So with the guidance from this blog, reflect back on Marketplace Sweeps week and use this time to make adjustments to your inventory and warehouse processes in order to prepare for the most lucrative time of the year.
Let’s take a look at the top five things to consider as you head into the holiday season:
Did you oversell any products on any of your sales channels?
Did you unexpectedly run out of any products during Marketplace Sweeps?
Did your warehouse team get all orders shipped out per requirements?
How is your return rate looking, post Marketplace Sweeps, and is there a theme?
Were your promotional efforts profitable?
Did you oversell any products on any of your sales channels?
Overselling on your own webstore is bad enough as you may lose one customer. Overselling on a marketplace is worse as Amazon and/or Walmart will quickly read one poor customer service issue as a warning sign for more in the future and scale back your presence on their respective marketplace. While the first hit to your business can lower your product placement in searches, resulting in a loss of hundreds or even thousands of future customers, the ultimate hit could result in your marketplace presence being completely shut down.
Clearly, this is something to be taken seriously.
If overselling did happen to your business last week, ask yourself: was it a result of too few products on hand? Or was it a result of inventory not being updated across sales channels fast enough?
These questions are relevant any time of the year, but during big sales events, your inventory situation can change in a matter of minutes due to increased sales order volume. While the implications are high, the good news is that the solutions are pretty straightforward.
Not meeting consumer demand as a result of too few products stocked means you either didn’t order enough or your products didn’t arrive in time from your supplier. Get ahead of Q4 with reporting. Go back and look at last year’s product trends, as well as trends before and during Marketplace Sweeps.
We’ve worked with thousands of brands at Finale Inventory, and we tell our users to order the “lower bound” of a high sales trend: know what your normal trend is and your higher trend, and then order on the low to medium side of that higher range, as not to order too much. Notice that this is a conservative stance and makes the most sense for more seasonal items that you don’t want to carry over into Q4. For year-round merchandise, ordering on the maxed-out high-end could make sense if your warehouse has the space for it.
Continuing on the topic: get those orders in now for Q4! There’s even a chance that “now” is too late.Some companies start ordering for peak season as early as May or June, and supply chains are experiencing latency on top of normal “demand and supply” slowness. Businesses should start getting those purchase orders in as soon as possible to avoid risking costly, delayed deliveries.
As a multichannel seller, having accurate inventory counts on all your sales channels (be it Amazon, Walmart, your webstore, and even your brick-and-mortar location) is critical to avoid overselling. If you’ve gone multichannel and are still in the pattern of updating quantities back to your sales channels once a day or, worse, once a week, you’re putting your business at risk by showing your sales channels inaccurate inventory counts and potentially overselling. While daily may have sufficed when you were starting out on a single channel, once your business goes multichannel, it’s critical to have synced inventory across your channels. Having an automated inventory management system that connects to all of your sales channels and warehouses becomes a critical backbone to day-to-day operations and a lifeline during peak sales season in order to avoid overselling (and prevent headaches).
Did you unexpectedly run out of any products during Marketplace Sweeps?
Like discussed above, running out of product stock is normally a bad thing, but consider this: as it relates to getting ready for Q4, overselling could be an indicator of a product trending in popularity, or at least ranking against the competition.
To consider if this may be the case for you, get a trend report of your product sales over the course of the last 30/60/90 days. Look to see if any products are outpacing normal trends, and reorder products at higher stock levels if you find that selling out during Walmart+ Week and/or Prime Day wasn’t a coincidence. You may also want to talk with your supplier for more colorways and/or sizes to push as a special offering during Q4, and assuming you’re increasing quantities, this could also be a way to lower your cost per item.
Did your warehouse team get all orders shipped out per requirements?
Nothing says “sense of urgency” like a customer shopping during the holiday season. Whether needing to meet next-day, 2-day, or 3-day shipping turnaround times, meeting the consumer expectation for on-time delivery as a seller is heightened in Q4.
If you weren’t able to keep up with the number of orders during Marketplace Sweeps or it was more difficult than it should have been, consider that a big warning sign to get your team, warehouse, and workflows cleaned up before November 24th (Black Friday in 2023).
In the next few months, evaluate:
Your staff: are new team members trained on warehouse SOPs and are aware of where to find products? If you hire contractors or part-time staff, is everyone up to speed on your set workflows? How does intake management work for your business? Are there one-off scenarios that your team needs to be aware of?
Your workflows: is there a different way to receive orders, pick or pack orders? If you’re currently having one team member pick individual orders, your warehouse probably resembles a bumper car scene: employees running into each other as they pick orders, causing frustration and a little chaos. Look at other pick and pack methods, like batch, zone, and wave picking, which groups or centralizes orders and team members in order to increase picking efficiency and reduce time wasted on running around a warehouse.
Your warehouse: is there a more efficient way to set up your warehouse? This one may be trickier to pull off before next quarter, but consider moving more frequently purchased items together, having individual kit and bundle components sorted close together on racks, or dedicated zones for “special” items that require special equipment or considerations to pick in order to save picking time and improve warehouse efficiency.
How is your return rate looking, post Marketplace Sweeps, and is there a theme?
While there is always a degree of “deal FOMO” (aka buying something in fear of missing out on a good deal) that may lead to higher returns, return rates for Prime Day can quadruple, going from 10% to as high as 40%. That aside, it’s important to look at the return reasons that your team plays a role in and make changes before Q4 hits: Did orders take longer than expected? Was the wrong item sent?
We’ve already talked about how to handle missed fulfillment and ship times, so let’s talk about incorrect items being shipped. Picking and packing is a meticulous job. With hundreds or thousands of orders coming through on a daily basis, your team needs to discern one unique order from another and keep each order correlated with the unique buyer. In addition to the different pick and pack methods mentioned above, having a system that provides on-the-spot quality control checks will dramatically reduce order error rates.
Using a mobile barcoding solution can help with accuracy across your warehouse workflows. From purchase order receipt audits to guided picking for sales orders and warehouse stock transfers, barcoding will also expedite processes, improving efficiency across your team, as well. While starting a whole new warehouse system may sound intimidating, setting up a new barcoding system can be more straightforward than you think.
Were your pricing methods and promotional efforts profitable?
You lowered your price, you may have also paid for advertising, and you got sales. Success. It’s that simple, right? Wrong.
You’re obviously in the business of making a profit, so be sure to always be mindful of your margins. While this seems painstakingly obvious, profitability can sometimes get overlooked in favor of turning inventory and making sales.
After this Marketplace Sweeps period, take a look at your profitability: understand your COGS (cost of goods sold), factor in seller fees and advertising costs…you may even want to go as far as to figure in all capital expenses like warehouse leasing fees and payroll to get the most comprehensive ROI. With that information, you can go back and evaluate your pricing strategy. Did your prices meet your margin requirements? Are your kits and bundles helping or hurting your bottom line? Have you explored a pricing strategy that takes a hit to margin, knowing that an item is often purchased with another item that has greater margins?
With these figures fresh in your mind, go back and set your min and max pricing, know how flash sales or advertising can impact orders and margin, and even consider pricing and promotional strategy tests on your own webstore in the coming months to see how things affect checkout rates.
Get Planning for Q4 Now
Streamlining warehouse operations is beneficial for your business’ sales potential, team productivity, and bottom line. This is important throughout the year, but especially during peak sales periods where the stakes are higher, and one setback can ripple errors down the line.
Looking at data can provide insights into what’s working, what’s not working, and where opportunities lie to improve. Having an inventory management system that can align your sales channels, warehouses, team, and accounting software means you’ll have access to reliable data at your fingertips.
Finale Inventory is an established inventory management provider that has helped thousands of sellers over the years with everything discussed in this article. We are experts in the field and guide sellers on how to achieve scalable growth. Working with Finale is easy, and getting launched can happen in a few weeks, so well before the start of Q4. Schedule a personalized demo today with the team to see how Finale can help your business get set up for a strong holiday sales season.
About the Author
Pauline Shiu is VP of Marketing and Partnerships at Finale Inventory. With nearly two decades spanning the retail, ecommerce, and software industries, she is passionate about connecting people and businesses together to help companies scale and grow. Pauline lives in Maryland with her two children and can be found either cheering her children on from the baseball or softball field sidelines or spending time on the water.