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26 September 2022
Amazon drops details on fall deals event: Prime Early Access Sale
The 48-hour event is set for Oct. 11-12. Holiday shopping is starting in October this year.
Amazon Prime Early Access is set. (Image via Amazon)
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After a summer of speculation, Amazon on Monday announced a new fall deals event for Prime subscribers.
Prime Early Access Sale is set to take place Oct. 11-12 across 15 countries. The event is being positioned as a kickoff to the holiday season, giving Prime members "exclusive" access to advance deals on items as shoppers search for gifts for others, and items for themselves.
An Amazon announcement said it is offering deals on “Peloton [which wasn’t available on Amazon until recently] and New Balance, and Amazon’s lowest prices of the year on select products from brands like Caudalie, Murad, and Philips Sonicare.”
Along with the deals event, Amazon said it will also debut a curated Top 100 list of its “most popular and giftable items” for the season, including products from Hasbro, iRobot, KitchenAid, and Samsung. Deals from this list will drop throughout the event across categories including electronics, fashion, home, kitchen, pets, toys and Amazon devices, Amazon said.
Amazon is also offering up to 80% off select Fire TV smart TVs, and additional savings on Alexa-enabled devices and products from LEGO, adidas, Furbo and Ashley Furniture.
“We are so excited to help Prime members kick off the holiday season with Amazon’s new Prime Early Access Sale—an exclusive opportunity for members to get deep discounts on top brands we know they are looking for this time of year,” said Jamil Ghani, VP of Amazon Prime in a statement.
The countdown is on: Prime Early Access Sales begins at 12 a.m. Pacific time on Oct. 11 in Austria, Canada, China, France, Germany, Italy, Luxembourg, the Netherlands, Poland, Portugal, Spain, Sweden, Turkey, the UK, and the US.
Here are a few takeaways on Monday’s announcement:
Prime Day, part 2: The two-day deals event adds another big sale to Amazon’s calendar alongside Prime Day, which is held in the summer. Amazon had reportedly been planning a “fall deals event” for months. Monday's news release did not detail involvement of deals from third-party sellers in the event, but a recent report from Digital Commerce 360 indicated that Amazon has been reaching out to sellers and sharing inventory shipment deadlines.
Pre-Black Friday: When it comes to holiday shopping, pre-Halloween is the new post-Thanksgiving. Holiday shopping has been shifting earlier and earlier in recent years. While last year’s supply chain challenges prompted many to factor delays into their gifting plans, this year is bringing more formal deal events that shift the calendar well ahead of Black Friday and Cyber Monday. Alongside Prime Early Access Sales, Target announced last week that it will run an early holiday edition of its Deal Days event on Oct. 6-8. This spreads out the calendar for the busy shopping season, offering more options for shoppers rather than concentrating all activity on a single rush.
Signup sweeteners: While holidays are the theme of Amazon’s deal event, the tactics are oriented around Amazon Prime in a similar fashion to Prime Day. To entice signups to the subscription ecommerce service that offers free delivery and returns, Amazon is rolling out promotions including four free months of Amazon Music Unlimited and a free year of Grubhub+ membership. Amazon is effectively saying that access to deals is one benefit of a Prime membership, while detailing other perks that go beyond shopping. Media is an increasingly important part of Prime. Earlier this month, Amazon Prime Video's season debut of Thursday Night Football drew a record number of Prime signups for a three-hour period, CNBC reported.
Halo effect? One question going into Prime Early Access: Will a fall event create a new rising tide that lifts all of retail? One of the things that makes Prime Day significant is its “halo effect,” which describes how other retailers get a boost from customers seeking deals. For the summer event, this has led others to time their own savings promotions around Amazon, though Walmart famously opted out of a Prime Day event this year in favor of its own Walmart+ event a month earlier. For the holiday event, Target isn’t timing its event with Prime. Walmart last week rolled out a host of new holiday initiatives, saying it is investing in price discounts, expanding its assortment, offering curbside dropoff and home pickup of returns and making upgrades to its app. While all of the retailers are making big early holiday pushes, it’s not as clear in this case that they are orienting around Amazon. Rather, they are making individual pushes that together could move the start of the holiday season to October.Year of deals: In the frenzy to prep for this year, keep this in mind for next: It's not yet clear whether Prime Early Access Sale will be a permanent addition to the Amazon calendar. Deals are expected to be especially important to consumers this year as they shop at a time of 40-year-high inflation, and retailers are responding in kind. An Index Analytics analysis found Prime Day discounts in 2022 were twice as deep as 2019-2021. At the same time, many retailers are seeking to move excess inventory that resulted from demand changes amid the return to in-person events. It remains to be seen whether Amazon is capitalizing on a specific opportunity in 2022, or creating a new tentpole for years to come.
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Operations
31 May
5 strategies for optimal inventory management on Amazon
Accurate inventory is now essential for Amazon FBA sellers, writes Emplicit's Evan Sherman.
Amazon used to be a lot more laissez faire about how Fulfilled By Amazon (FBA) sellers used their fulfillment centers. Sellers could send in inventory, and, while the space wasn’t unlimited, if their sales were not as forecasted they would simply pay long-term storage fees. Sure, if a seller’s inventory management was poor enough they would have their inventory storage limits reduced and pay higher storage fees, but this was just an incentive not to let things slide too much.
However, in 2022 Amazon reduced storage limits overall to the point where some FBA sellers had sales and catalog size impacted, and in March 2023 Amazon revised their inventory system. There is now an incentive for FBA sellers to be highly accurate with inventory management because Amazon will reward them with increased storage limits. Precision is a carrot now, rather than a stick.
In this article, we provide five strategic methods that sellers can utilize to optimize inventory management on Amazon.
1. Leverage data to anticipate demand, and regularly monitor and adapt
Achieving successful inventory management on Amazon requires a profound understanding of past demand patterns and the capacity to accurately forecast future demand. Seasonality, market trends, historical sales figures, competitor activity and planned promotions all play a crucial role in determining the trajectory of sales.
At Emplicit, we advocate for the analysis of multiple historical data points, encompassing previous 7, 30, 60, and 90-day sales figures. Our logistics experts factor in internal factors such as stock availability, marketing spend, promotions, and sales and margin targets, and external factors such as seasonality, Amazon trends, new category restrictions and market entrants. A comprehensive review of shipments in working, shipped, or receiving status is also beneficial. Striking a balance between what has been sold, what is available, and what's en route to an Amazon fulfillment center is key to precise forecasting.
Inventory management isn’t a static task; it requires constant vigilance and flexibility. FBA sellers should regularly review and modify their demand forecasts, adjust their replenishment suggestions based on demand shifts, and update their minimum reorder points as required.
Sellers should review sales daily, plan replenishment frequencies to suit their needs, and maintain appropriate inventory levels at Amazon. Weekly replenishments can help keep a seller’s inbound pipeline full, minimize out-of-stock instances, and account for unforeseen supply chain disruptions.
2. Prioritize items based on sales and profitability
Amazon’s organic and paid algorithms prioritize products with high sell-through rates. This means best selling products end up selling better. Focusing on high-performing items allows FBA sellers to reduce monthly storage costs, avoid aged inventory and the associated fees that Amazon imposes, and curtail the need for costly removal orders. And sales velocity is the quickest way to get Amazon to increase your storage limits. Concentrate on the 20% of items that generate 80% of sales.
At the same time, sellers should prune their catalogs by removing slow-selling items. These items negatively affect Amazon’s Inventory Performance Index (IPI) score, which directly influences the space Amazon allocates to a seller’s inventory in their fulfillment centers.
If sellers are tight on inventory space, as well as the best-selling products, they should prioritize products with higher margins until Amazon provides additional storage, and they should reduce marketing spend accordingly – something which necessitates a close relationship between inventory and marketing.
Ranking products by sales and margins, and calculating the storage space each product takes up will go a long way towards understanding and anticipating demand on Amazon.
3. Capitalize on Amazon's capacity monitor for space management
Amazon’s capacity management system is a new system for allocating inventory limits to FBA sellers and allowing sellers to gauge their inventory capacity at Amazon’s fulfillment centers. It also enables sellers to bid on increases to their inventory limits.
Previously, Amazon had restock limits which were updated weekly based on the seller’s previous 90-day sales. Restock limits were determined by Inventory Performance Index (IPI) metrics such as sell-through, excess inventory, and stranded inventory. However, because the restock limits were updated weekly, it was challenging to plan accordingly, especially heading into a peak season or if a seller was about to run a promotion.
With Amazon’s Capacity Monitor program, sellers are given a monthly capacity outlook based on the cubic feet of space occupied by their products in Amazon’s fulfillment centers and their IPI metrics. Amazon not only provides a current month outlook on available space; they provide an estimate for the next three months which can aid in the inventory planning process.
To take advantage of the new system, it’s imperative FBA sellers understand their product's physical footprint in relation to the allotted space Amazon provides (Amazon does still provide unit estimates). Knowing a product’s cubic feet and the product tier designation allows for effective planning of inventory replenishment. Exceeding space limits means overage fees from Amazon, however, if a seller knows they have a peak in sales coming up they can bid for additional capacity (in cubic feet). However, selling-through this additional inventory means Amazon waives those fees, so it’s a win-win.
At Emplicit, we have seen the capacity monitor program benefit our clients, with many clients seeing an increase in the amount of inventory they can ship in – likely due to healthy sell-through velocity and other IPI metrics. The program has fundamentally changed the way we approach managing our inventory on Amazon, so everything sellers do regarding inventory planning should be within the context of Amazon’s capacity monitor program.
4. Consider Amazon-specific packaging
Smart sellers should already be considering the impact of their product packaging on their FBA fulfillment fees. If the actual product size allows, sellers can generate significant savings by reducing the size of their packaging. Amazon’s Small Standard rates are 15-20% cheaper than Large Standard rates depending on weight, and Amazon’s Small & Light rates are 15-27% cheaper still than Small Standard rates. However, fulfillment cost savings are not the only reason to reduce packaging size, smaller packaging can significantly increase Amazon inventory cost-efficiencies.
With Amazon’s capacity management system providing inventory space based on cubic feet rather than number of units, the space each product takes up is now more important than ever. While larger packaging sizes can sometimes improve sales in brick and mortar retail, sellers should consider developing smaller Amazon-only packaging. This will not only reduce fulfillment costs, but allow more units to be stored in the same inventory space. The combined savings can more than offset the cost of a redesign and second packaging print run.
Additionally, smaller packaging may qualify sellers for Amazon’s Compact By Design badge. This helps brands stand out, and increases click-throughs and conversions. (We suspect there are algorithm tweaks for brands with certain badges too, but it’s difficult to prove.) Amazon-specific packaging can help with Transparency (anti-counterfeiters) and help combat unauthorized resellers.
While it might seem like a significant investment and not something the inventory team typically gets involved with, reducing packaging size is a long-term way for FBA sellers to optimize inventory management.
5. Ship from China straight into FBA with Amazon Global Logistics
Amazon Global Logistics (AGL) offers a streamlined solution for sellers whose products are manufactured in China. AGL eliminates the need to use freight forwarders who would usually receive a shipment from China, then split up that shipment and forward on to multiple Amazon fulfillment centers per the standard FBA process. Instead, sellers can book shipments directly with Amazon, complete the necessary export/import documentation, and ship directly to US, UK or European fulfillment centers – sending the entire shipment to a single fulfillment center.
If leveraged properly, AGL can save sellers thousands of dollars in warehouse and 3PL fees and reduce the need for inventory to be processed multiple times before it arrives at Amazon’s fulfillment center, meaning inventory gets where it needs to be quicker.
AGL offers two shipping options – Standard Ocean Freight and Fast Ocean Freight – with the standard option giving sellers the opportunity to either ship via a full container load (FCL) or less than container load (LCL). Shipping partial container loads with Amazon doesn’t slow shipments down versus other carriers because of Amazon’s scale. Amazon’s economies of scale mean that AGL can offer shipping prices from mainland China and Hong Kong that most sellers are unable to match. And Amazon’s expert customs brokers get products cleared through customs quickly because Amazon has a vested interest in shortening the time to market.
This one-step international shipping direct to Amazon was actually something we pioneered before the advent of this service from AGL – working with our client Shapermint and their manufacturers in China and logistics team to ensure packaging and shipments were FBA compliant. However, now AGL offers this service, it’s an even easier solution to a common challenge. We suspect AGL will roll out in other international manufacturing markets, but Amazon is tight-lipped for now.
The importance of expert inventory management
Amazon inventory management is complex and needs constant attention. Sellers can hire a fractional inventory specialist because this is not something that should be trusted to an Amazon generalist. If sellers get inventory right, it will keep pace with sales. But if they get it wrong, their inventory can become the main thing holding them back.
Evan Sherman is the director of logistics at Emplicit.
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