As an Amazon seller, seasonal spikes have the potential to be both exciting and truly daunting for your ecommerce business. While these spikes can offer immense revenue potential, they often come at a significant upfront cost that can be challenging to manage. Increased demand around the holiday season, Prime Day, back-to-school periods, and other peak times can lead to a dramatic increase in demand–requiring more inventory, increased operations, and, inevitably, better access to working capital. In this blog, we’ll explore how strategically utilizing funding can help you effectively prepare for and capitalize on these seasonal spikes, allowing you to scale your Amazon business to the next level.
Understanding Seasonal Spikes on Amazon
Seasonal spikes in ecommerce are periods when consumer demand increases significantly, typically correlated with changes in the weather or consumer holidays and the relevant products for those periods. It’s critical that Amazon sellers optimize for seasonality in order to streamline growth and ensure the best results for their business. By truly capitalizing on the immense volume of sales that come with these seasonal spikes on Amazon, you can drive profits and take your business to new heights.
However, if unprepared for seasonal fluctuations, Amazon sellers often find themselves in a cash flow crunch, running out of inventory, or losing sales to competitors. This means that it’s critical to understand seasonal variation patterns and execute appropriate demand forecasting to plan ahead and avoid those annoying hiccups that come with delayed Amazon payouts. All of this to say, having accurate predictions regarding traffic to your product listings and order demands, optimized advertising investments and timelines, and a seamless operations and fulfillment process is key for success.
Common Amazon Seasonal Events
While the season changes periodically with the weather and there are plenty of holidays throughout a calendar year, certain events tend to hold greater influence over ecommerce marketplaces. These high-priority events help to explain shopping trends and customer behavior, so they’re important to take into consideration when forecasting for your Amazon business.
Amazon Prime Day
Over the past decade Prime Day has become one of the greatest success in only shopping events. Taking place in mid-July each year, Amazon Prime Day boasts some of the biggest deals of the year for customers, driving demand and satisfaction along with sales and profit. Amazon sellers preparing for Prime Day begin months in advance, increasing inventory, ramping up marketing efforts, and launching new products ahead of time to ensure success.
Black Friday and Cyber Monday
Ecommerce “exclusive” sales aren’t the only holiday events that have an impact on ecommerce seasonality. Long standing retail sales, including Black Friday and Cyber Monday (also known as BFCM), have a major impact on Amazon sellers to this day. Amazon sellers have the opportunity to run deals all throughout the long, holiday weekend on the Amazon marketplace–meaning even greater revenue.
Back-to-School
The end of summer marks the beginning of back-to-school season for customers with school-aged children. While many ecommerce seasonal spikes are characterized by relevant products, back-to-school events are especially so, with school supplies, clothing, and dorm essentials making up most sales.
The Importance of Preparation
Measuring your Amazon business’ seasonal spikes is essential to maintaining agility throughout the year and maximizing your overall profits. If you can accurately forecast demand and sales, ecommerce seasonality on Amazon has the potential to help your business reach new heights within an accelerated period of time. Many Amazon sellers even manage to secure a quarter’s worth of sales in just one day with major shopping events like Prime Day or Black Friday.
However, if you aren’t well prepared with historical data for seasonal spikes on Amazon, you risk missing out on sales and profitable opportunities or, worse, dealing with a serious cash flow crunch. To truly optimize for seasonal spikes on Amazon it’s important that you monitor trends in sales and revenue, website traffic, conversions, customer behavior, and more. Not only will this data help you prepare for demand, but it also ensures that every dollar of working capital is put to maximum use in alignment with your cash conversion cycle.
Leveraging Funding
While understanding your Amazon business’ seasonal spikes and planning accordingly is certainly critical, it’s also important to maintain a healthy lead time on seasonal events and trends. By planning far enough in advance for your business to experience increased demand and sales, you’ll be able to remain agile and flexible enough to adjust to evolving customer behavior or unexpected challenges. Seasonality can be challenging for any ecommerce business, but preparing for the highs and lows of every season will allow you to take advantage of consumer tendencies throughout the entire year.
Increased Inventory Management
Proper inventory management is key to optimizing your Amazon business for seasonality. By taking advantage of advanced inventory forecasting tools and software to predict demand and optimize stock levels, you can proactively avoid stock outs and beat competitors. Many Amazon sellers even invest in safety stock to mitigate risk of stockouts during peak periods.
However, it’s important to remember that those tools aren’t free. Not to mention that increased inventory levels come at a high upfront cost. To meet the increased demand that comes with seasonal spikes on Amazon, you’ll need to work with your suppliers to purchase products in advance and at a rate you’re comfortable with. Funding can not only help you ensure that you have the cash flow to invest in more inventory and the necessary management tools, but also help to keep your business moving at a stable rate post-shopping event while waiting for Amazon payouts.
Utilize Multiple Operations Strategies
Even if you utilize Amazon FBA, during peak seasonality it’s wise to have alternative operations and fulfillment methods prepared. Whether you simply didn’t have the cash flow to purchase products far enough ahead of time to ensure they were at Amazon warehouses or you have your own packaging and shipment facility, offering multiple fulfillment channels will help you scale up your operations to meet increased demand.
Offering fulfillment by merchant (FBM) will not only allow you to increase your window to order inventory by bypassing Amazon’s check-in process, it will also give you a competitive edge on competitors. Amazon shoppers are looking for coveted items at a good deal during seasonal events, which means those items tend to sell out quickly. By storing and shipping items yourself, or through a 3PL, you’ll have extra inventory once competitors run out. While you may not be able to beat free shipping for Prime members, you’ll still catch plenty of customers–and likely make a bigger profit with increased margins.
The most strategic sellers often utilize a combination of strategies, dividing inventory between Amazon FBA and FBM to maximize sales and profits. By combining operations strategies you can scale up your fulfillment game to ensure that all potential customers have a 5-star experience.
Effective Marketing and Promotion
While it’s important to periodically review and update your marketing campaigns, this is especially critical if you’re getting ready for a busy season for your Amazon business. Good marketing, especially from Amazon’s PPC campaigns, will help drive shoppers to your products and increase conversion rates. However, PPC campaigns can rapidly become expensive during ecommerce seasonal spikes, so be sure to set a healthy budget.
To truly make the most of a season, running campaigns ahead of time will help to improve brand recognition with consumers and make your products more identifiable. Ad campaigns will also remind customers that deals are temporary and that they need to act now, ensuring your sales go through the roof.
If you’re looking for options off-marketplace for Amazon product advertising, consider Amazon influencer marketing, Google ads, and traditional email and text marketing campaigns. While these marketing strategies may not be as simple to implement, they often come at a fraction of the cost with strong results.
Creating a Strategic Funding Plan
Successfully navigating seasonal spikes on Amazon requires careful planning, strategic investments, and efficient resource allocation far in advance. By leveraging funding effectively and adopting a proactive approach to preparation, you can position your business to thrive during peak periods and capitalize on lucrative sales opportunities. Remember, the key to stay agile, adaptable, and customer-centric in your approach is maintaining enough cash flow to take advantage of every season. That’s where Viably comes in.
Viably is a people-first banking and funding experience, designed to help eCommerce sellers grow their business the way they know best. Learn how much funding your Amazon business could be eligible for in minutes with their simple application here.
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About the Author:
Viably is an all-in-one free financial tool for online sellers to run and grow their business.
