maximize your holiday sales: planning for amazon q4 2015
TRANSCRIPT
Teikametrics: www.teikametrics.com
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Amazon Q4 Planning Blog Post: http://goo.gl/43Xl0P
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Twitter Hashtag: #AmazonHolidayWebinar
Webinar Resources
About Alasdair• Started in e-commerce in 2001 with a dorm room e-commerce business• Studied economics at Harvard• One of the first Amazon 3P partners in 2003 • Experience developing software solutions for enterprise including a platform for the New
York City Marathon and Newscorp / Times of London • Passion for technology and using big data tools to help solve problems
About TeikametricsFounded in 2012
Our mission is to use data and metrics to help e-commerce businesses sell more
Core team of data analysts, software developers, data scientists, and consultants
25 employees based in Boston and growing rapidly
Clients see a 150% increase in revenue with a large improvement in Gross Margin
FBA Optimization
Our solutions
Data Driven SoftwareSolution for FBA Retailers
FBA Insite Software
Jumpstart$990
Brand Accelerator Program
Data Driven Marketing forDirect to Consumer Brands
Professional$2,499
Consulting and Expert Optimization
from $4K per month
Repricing Only$499
99 Days Until Christmas
• Amazon continues to dominate e-commerce market share and Q4 2015 is set to be the largest ever
• Prime subscriber base exceeds 40 million subscribers
• FBA strategy and optimization has increased value in November and December
FBA > Prime Opportunity
Start your September Clean-Up Now
• Initiate a plan to maximize available cash for possible holiday investments NOW
• Review all investments and slow moving investments in detail right now
• Do not apply a blanket mark-down rule, be more strategic by calculating expected value
Clean-Up Inventory by Supplier
• Segmentation helps you see the big picture and lets you make the right informed decisions based on the entire portfolio
• Systematically break down each group of products to optimize
• Investing time in this right now frees up critical cash for your high ROI investments
Key Dates
Cyber Monday: November 30, 201574 Days Away (~10.5 weeks)
• Last delivery date to receive inventory for Cyber Monday at Amazon fulfillment centers is November 16, 2015
*Amazon recommendation - beware!
Expect Delays
Wall Street Journal - Wednesday, September 16, 2015
Key Dates
Black Friday: November 27, 201571 Days Away (~10 weeks)
Key Dates
Cut-Off Date for customers to order Standard Shipped Products:Monday, December 21, 2015
• Last delivery date to receive inventory at Amazon fulfillment centers is Monday, December 7, 2015*
*Amazon recommendation - beware!
Key Dates
Cut-Off Date for customers to order 2 Day and Next Day Products:
Monday, December 22/23, 2015
• Last delivery date to receive inventory at Amazon fulfillment centers is Tuesday, December 8, 2015
*Amazon recommendation - beware!
Plan Your Target Ship Dates
Target Cyber Monday Delivery Date of November 16
• E.g.: 2 days for PO to process, 5 days to ship, 1 day to prep, 6 days to ship and receive at Amazon = 14 days
• Add 50% buffer = 21 days
Plan Your Target Ship Dates
Target Cyber Monday Delivery Date of November 16
• POs should be placed by mid-October
• 30 days from today!
Planning Your Buying
• Take a data-driven approach
• Well planned analytical strategy will create a competitive advantage versus competitors who ‘carpet-bomb’ without analytics
• ACTION ITEM! Start by initiating vendor communications to evaluate your supply-side options
FBA Trading is a game of online strategy
Example Buyer Questions
• What are our potential price discounts at larger quantities?
• Can we get free freight on larger orders?
• What discounts are available for ‘take-all’ quantities?
• What if we place a PO for 4-5x our current volume? What can you do for us?
• Can we switch out inventory if it doesn’t sell by January?
Build A Forecast Model
• Use Excel to develop a forecast model
• Data inputs are trailing sales performance, trends, 2014 performance, supply-side information
• Evaluate downside case, exit strategy, and other important assumptionsR
even
ue (0
00’s
)
0
125
250
375
500
Oct Nov Dec
Build A Forecast Model
• Focus on the investments which have the lowest risk instead of the highest upside
• Go big with opportunities where you can protect your downside case: e.g. Swap out of inventory, high demand in January
• Be conscious of products with high potential returns
• Evaluate all of these options to create your decision matrix
Calculate Your Buying Budget
• Spread your money so its doing the best ‘work’ for your company - every dollar needs to be working for a return
• Keep prioritizing and evaluating the risks in different scenarios
• Plan the required activities to fund investments
• Remember “Opportunity Cost” and “Cost of Capital” - each investment has a trade-off
Price to Maximize Profit
• Do not fully automate your repricing strategy - game is too complex
• Analyze data and adjust prices based on target GM
• Monitor competitor’s supply and maximize your FBA advantage
P2
P1
Supply
Demand 1 Demand 2
Hold or Sell?
• Timing is critical
• Stick to your buying game plan - disciplined approach across all buyers
• Focus on Adj. GM% hurdles and do not get greedy
• Dramatic decline in costs as retailers exit investments (amplified in certain categories e.g. Toys)
Prepare Your Team
• Develop a process for managing the largest investments during the busiest period with your buyers
• Communicate and review frequently progress using common metrics during the holiday period
• Monitor your target inventory levels throughout December
• Prepare your FBA prep team to minimize errors in shipping
GOOD LUCK!
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