There’s Christmas, there’s Kwanzaa, and then there’s Amazon Prime Day. It’s yet another annual celebration of retail frenzy in which Prime subscribers flock to the Interwebs to get smashing deals on Instant Pots, Bluetooth headphones, and all the other stuff they want but probably don’t need. To sweeten the pot, Amazon will list ten million items for free one-day shipping.
Retailer heaven, right?
Sort of. For the Amazon sellers playing in this playground, Prime Day represents a whole different set of challenges to be prepared for. Here’s what you need to know.
What is Amazon Prime Day?
Put simply, Amazon Prime Day is deal city. It’s the close cousin of Black Friday, Cyber Monday, and Galactic Retail Empire Day (okay, we made that last one up—coming soon!). It’s the day that Prime subscribers enjoy exclusive access to a wide variety of details on retail goods. And just like most other modern retail blowouts, Amazon Prime Day actually lasts beyond a single day (last year, it lasted 48 hours).
For retailers that do business on Amazon, it’s the day when the demands on their inventory intensify a full turn on the dial. Orders are likely to come in fast, and in droves, sometimes spiking far beyond the thresholds sellers otherwise encounter during normal times of the year.
When is Amazon Prime Day 2019?
Amazon Prime Day 2019 takes place on July 15.
How do I prepare for Amazon Prime Day?
For sellers, Amazon Prime Day 2019 is like any other retail “holiday”—crazy and with special considerations. Heavy is the head that wears the crown! Because if you aren’t prepared to absorb this sudden—and sometimes dramatic—spike in orders, your standing as an Amazon seller (and your business overall) might come out the other end worse for the wear.
To avoid such a fate, here a few tips to prepare:
1. Remember that Listing a Lightning Deal is a paid privilege (and it ain’t cheap)
The cost of listing items as Lightning Deals is something to keep in mind. As you look at Amazon’s fees, which tend to increase year over year, ask yourself: is it even worth it? Nowadays, Amazon charges a flat fee per item listed on Lightning Deals. And that fee is nothing to shrug at.
2. Make preparations in advance
Are you prepared to fulfill a lot of orders, for a lot of different products, all at once? And do you have contingencies in place for low-stock items, or those that run out quickly? Assuming this isn’t your first rodeo, it’s important—to the extent possible—to forecast inventory fluctuations in advance of Amazon Prime Day, especially if you have available from last year.
If your Lightning Deals are being fulfilled through FBA, there’s not a lot of extra pressure on you as a retailer, which can be a good thing. If, however, you are fulfilling yourself through Seller Fulfilled Prime (sometimes known as “merchant fulfilled Prime”) then there are some measures you may want to take into account.
The first and most important thing you need to get a handle of is fulfilling those Prime orders. We highly recommend prioritizing orders based on channel or urgency. For example, RetailOps will have your warehouse staff fulfill all Amazon Prime orders first before all others to make sure you meet your fulfillment requirements.
Another fulfillment tip: in a typical Lightning Deal you tell Amazon how many you wish or have available for sale. We recommend moving this inventory closer to the front of the warehouse (or wherever your fulfillment station is located) for greater speed.
But, wait… Didn’t you tell me last week about Dynamic Put Away and how we should put inventory wherever we can because it’s faster and more efficient? Yes I did, and nine out of ten times that is correct. However, in this scenario we have a finite number we are willing to sell in a finite period of time. There’s a much higher probability that you will sell the majority (if not all) of that inventory. It just makes logistical sense for it to be at an arm’s reach.
This may go without needing to be said, but just in case, you should also make sure that the inventory that is available for a Lightning Deal is actually available! If you’re selling on multiple sales channels and the total inventory available is close to or an exact match of the Lightning Deal quantity, do make sure your other sales channels are also not able to sell that inventory for a period of time.
Do those optimizations interest you?
RetailOps can do that without breaking a sweat.
3. Consider how you’re priced
Now, we’re not saying to squeeze your customers. But this spike in demand presents an opportunity to make the most of your in-demand items. The way that you price your Prime Day items, especially in response to increased demand and stiff competition, can help maximize your margins. For example, many retailers forget that Prime Day shoppers are looking for a deal. If they feel that you are pricing your item at or close to your normal asking price, they may go elsewhere. Weird, right? But pricing is very much a perception game. And Prime Day is about volume.
What you lose in your margin you gain in sales volume.
RELATED: Sell on Amazon using RetailOps
4. It’s time to move that lingering stock
Similar to your in-demand items, it’s important to consider your out-of-demand items, too. Amazon has done a great job creating and executing what Prime Day is for consumers. It’s a day that consumers look forward to and wait anxiously to see what possible new gadgets and home goods they can snag at a great price.
But let’s be real for a moment. Prime Day is just as much about the sellers as it is about the customers. It shouldn’t be a surprise to anyone why Prime Day just so happens to fall close to the halfway mark before the next big holiday shopping season. Amazon and their sellers have SO MUCH inventory that they just need to get rid of so they can bring in the new stuff. Prime Day is a good opportunity to price these items to sell—to finally move them to avoid any impending fees and/or to make space for the next wave of inventory.
5. Don’t get too used to it
You crushed it on Prime Day—or you’re projected to. Congratulations! It’s important to adjust inventory levels both in preparation for Prime Day and all that will happen afterward. Remember that this kind of spike is not necessarily the norm. Often, it’s a fool that rides the wave to high and fails to anticipate the crash and ride it out. Same goes for spikes—up or down—in your retail inventory.
Amazon Prime Day is just one day (well now two days)
Growth-oriented retailers—of any size—all pray to the same altar: think big. And those retailers who go big or plan to go big soon understand that Prime Day is one of many special considerations that impact inventory management throughout the year.
Going “big” in retail usually means managing multiple sales channels all at once. Prime Day is just one of these channels, and it doesn’t exist in a vacuum. What happens on Prime Day and other retail holidays—especially with regard to inventory—can have a ripple effect. Keeping it all straight, maintaining the right inventory levels, and making sure customers are happy with their experience is essential. And very few—if any—retailers aiming to go big do so without an inventory management system in place to support their ambitions.