Now that the rush of holiday sales is over, I can finally sit down and detail how things went in regards to my first fourth quarter (Q4) selling on Amazon using FBA and also as a merchant fulfilled seller. As I stated in my last few blog posts, I went into this selling season with no prior Q4 experience underneath my belt. Everything that occurred was definitely a learning experience and has given me more insight as to what to focus on if I’m still selling online during the next fourth quarter.
Was Q4 really that good?
If you have been selling online for any length of time, you may have noticed that the closer you get to October, the more often you will begin to see the term “Q4” pop up at least once a day if you are active in any online reselling community. I could not go a day without reading someone talking about Q4 and how wild it is. To be quite honest, I was originally going to write that Q4 was slightly “hyped up” in my opinion — until it ended. You see, once the holiday buying ended, I noticed a sharp decrease in my sales (as shown further below). I became so used to waking up and seeing a flood of sales that I completely lost track of what my sales actually looked prior to Q4. To be fair, I also wasn’t engaged in any type of retail buying before Q4 like I was during the end of October through December.
Now that I’ve gone through my first fourth quarter, I can honestly say that about 95% of everything I’ve heard about this time of year is true. The other 5% that I feel was slightly “hyped up” was the notion that everything sells during this time. While I definitely had items that I couldn’t keep in stock, I certainly didn’t experience the phenomenon of “everything flying off the shelf.” This is especially true for my long-tail items that have been sitting in Amazon’s warehouses for some time now. Part of me expected a good portion of these items to sell during Q4, but only a handful of them did. The bulk of my sales came from merchandise purchased during November and December.
So What Worked?
There are a few things that worked for me during this holiday season, the most notable one being the fact that I followed through with my plan to merchant fulfill items that I could not get into Amazon’s warehouses in time. Besides fulfilling orders myself, Hubby and I decided to use this time to turn our money much faster. This meant that we were willing to take as low as 50% ROI per item instead of our usual goal of 100% ROI. This ultimately helped us exceed personal sales goals that we set.
What the Q4 Rush Looked Like…
Selling during this time of year definitely distorted our reselling reality. At any given time we would wake up to several pages worth of sales before noon. This just isn’t typical for us or the selling patterns that I’ve witnessed the months prior to December.
Here’s a shot of what our December sales looked like (in light of the fact that my next blog post will be my income report, I’ve removed the actual sales figures from this screenshot):
Looking at the above image, you can see that the week before Christmas was by far the best week of the month for us in terms of gross sales. In fact, more than 50% of our monthly sales occurred during this week. That’s a LOT of sales in a 7 day period.
I stopped merchant fulfilling orders on December 20th (the Saturday before Christmas) and by Christmas Eve, our sales came to a complete standstill. This is right around the time when reality began to set in. I don’t know if this lack of sales had to do with the fact that Christmas was near or because we had run out of our best selling products but it certainly knocked a little wind out of our sails.
What I Would Do Differently…
If we’re still selling on Amazon during the next fourth quarter, here are a few of the things that we would do differently:
#1: Focus less on toys
We had a lot of toys that did not sell and many that we broke even on. This was my first time ever selling toys during the month of December so I really didn’t know what to expect, but I would liken this experience to finding clearance items at a big box store that hundreds of other sellers jump on as well.
Many of the prices that we set before our shipments arrived at Amazon had all but tanked by the time those items were checked in. I also didn’t like the idea of banking on toys increasing in value because Amazon was out of stock. I’d much rather stick to what worked well for us during this time and it was NOT toys! 🙂
#2: Don’t merchant fulfill toys that cannot fit into a bubble mailer or that weigh more than 1 lb.
I made the mistake of listing several hot toys via merchant fulfillment that did not fit this rule. It wasn’t until I had to package them that I realized that most of my profit would be eaten up by shipping fees because these items were rather large and heavy (like this toy for instance) and I had to ensure that they made it to the customer before Christmas.
If I merchant fulfill any toys next year, they will only be small and lightweight.
#3: Buy more of our steady sellers based on November’s numbers.
We had approximately 20 items that we were constantly replenishing during the month of November. We thought that if we purchased 200 of those items and sent them in during the first week of December that it would be enough to satisfy the demand. Boy were we wrong!
If given another opportunity, we will go much deeper and buy more quantities based on the demand that we see during the month of November.
#4: Buy more clothing!
I never grew up celebrating Christmas like most people do, but if there’s one gift I’ve given (and received) during this time of year, it is clothing. It just so happens that clothing was one of our top selling categories during the month of December. I honestly believe that if we would have put more time into sourcing for this category, it would have surpassed our toys sales. Instead, in came in right underneath toys.
Our #1 merchant fulfilled category was clothing. I only merchant fulfilled clothes for a week out of the month and somehow managed to gross over $3k during those few days. I can only imagine what those numbers would have looked like if I actually had some of my best selling clothing items in Amazon’s warehouse instead of in my house.
#5: Hire someone to handle my merchant fulfillment orders.
Merchant fulfilling 40+ orders a day was very exhausting. If I could do things all over again, I would hire someone to do this for me so that I could focus on sourcing.
#6: Reactivate my Endicia account.
After shipping 20 or so merchant fulfilled orders in succession through Amazon’s shipping portal, I realized that I needed to find a faster way to accomplish this task. It was taking far too long for me to get packages prepared because of the numerous prompts that you have to go through just to pay for shipping and to print packing slips and postage. Thank goodness I discovered Endicia during this time. I signed up for a “Professional” account and I plan to do this again since I was able to batch print postage and packing slips. This literally cut the time I was spending on shipping merchant fulfilled orders in half.
#7: Focus on groceries!
I left a LOT of money on the table by not purchasing any grocery items until the tail end of December. I didn’t even think to touch this category until I saw some inspiring posts by Dallas Moore (on his Facebook page) and Katharyne Shelton (via her Facebook group). Once I got hip to the fact that I was missing out on some sales, I headed to my local big box store to scout. I managed to fill one cart (I couldn’t do any more since I had my daughter in tow) and I processed it for pickup in about an hour. A small portion of it hit the warehouse just before Christmas eve and I sold out of at least 50 products that I plan to wholesale going forward.
#8: Hire a housekeeper and meal plan ahead of time.
I think this statement is pretty much self explanatory. I barely cooked during the month of December and there were times when I desperately needed a housekeeper to help keep things tidy. Hubby and I knew going into the month that we were going to stock up on the essential food items, but everything else was being ordered out. Our usual grocery budget was diverted to eating at some of our favorite restaurants given that I didn’t have much time to spend in the kitchen.
#9: Go deeper on oversized Black Friday toys!
Hubby and I were very cautious with Black Friday spending. Unfortunately, this meant that we left a lot of money on the table in our attempts to not go “too deep” on certain products. Take for instance this particular toy. This scooter went on sale on Black Friday at Kmart for $15. Instead of going deep and buying 40 or more, we only bought 8 of them. It took just under a week before we were sold out (and this was at the beginning of December).
#10: Place wholesale orders in August!
I came on to the wholesale scene a little too late. By the time I wanted to place orders, the lead time was so long that I would not have been able to get things into Amazon’s warehouses in time. I know now that if I want items in Amazon’s warehouses before the rush picks up, I have to start ordering in July or August.
#11: Call in reinforcements!
I had a lot of help during the month of November and December. My grandmother became an honorary member of our team while she stayed with us during the holidays. She managed to prep and ship over 300 items and we paid her handsomely…with popcorn and other goodies that she loves. Also, my mother came to town on Thanksgiving and helped watch our daughter. This allowed us to stay out until the wee hours of the morning to source Black Friday sales.
Come this time next year, we plan to call in all hands on deck. Hopefully we’ll be armed with a much larger sourcing budget and we’ll need all the help we can get to take advantage of the many sales that occur during November and December. We also anticipate needing much more assistance with packing and shipping our purchases. This is by far the most time consuming aspect of FBA.
That pretty much sums up my adventures with reselling during Q4. It was quite the ride and despite it being so hectic, I would definitely do it again if given the opportunity.
I truly hope that you had a prosperous Q4 as well and hopefully this post inspired you to do something different to prepare for the upcoming fourth quarter — which is only 9 months away! 🙂