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Holiday Inventory: Your Profitable Strategy Starts Here

In a recent CNBC supply chain survey, only 36% of respondents said they expected inventories to return to normal by the end of 2023. While we’ve come a long way from the Great Toilet Paper Wars of 2020, inventory is still an unpredictable beast — especially around the holiday season.

As Black Friday approaches, retailers continue to grapple with an inventory glut, while labor issues and other supply chain setbacks loom.

Consumer spending habits have also become much less predictable, with many people doing their holiday shopping significantly earlier or later than usual.

In short, it’s anyone’s guess what the 2023 holiday shopping season will look like for e-commerce sellers. The only way to prepare is to brace for all possible scenarios.

In this guide, we’ll discuss how and when to start preparing your holiday inventory and walk through the key dates and steps to take.

Holiday Inventory Prep

  • Why Your Holiday Prep Needs to Start Now
  • Key Holiday Dates for 2023
  • 7 Essential Holiday Inventory Planning Tips

Your Holiday Prep Needs to Start Now

It’s always been important to get your holiday inventory up to speed early. Whether you’re fighting to meet strict Amazon FBA deadlines or navigating your relationships with 3PLs or not-so-on-time suppliers — it pays to have a head start.

But the market keeps getting less and less predictable. And consumer spending habits continue to puzzle economists. This Q4, it’s more crucial than ever to treat inventory like a core part of your strategy — not a last-minute triage operation.

As an e-commerce seller, you can no longer afford to make broad assumptions about seasonal spending patterns. Nor can you guarantee all of your shipping partners will get your products to your customers on time.

What you can do is make sure you have a lean, agile, and proactive inventory strategy in place. One that saves you money, while getting your products into your customer’s gift wrap-wielding hands well before the trees are trimmed and the menorahs are lit.

Key Holiday Dates for 2023

To make the most of the holiday season, take note of the following days. Then, plan your inventory, schedule marketing campaigns, and target your social media accordingly: 

  • October 26: Amazon’s recommended arrival date for seasonal FBA inventory (US)
  • October 31: Halloween & last day to order inventory ahead of Lunar New Year
  • November 1: Last day to get Black Friday/Cyber Monday inventory to FBA (US)
  • November 5: Daylight Savings Time
  • November 23: Thanksgiving
  • November 24: Black Friday
  • November 25: Small Business Saturday
  • November 27: Cyber Monday
  • December 1: Last day to get Christmas inventory to FBA (US)
  • December 7-15: Hanukkah
  • December 17: Super Saturday (AKA Panic Saturday for last-minute shoppers)
  • December 24: Christmas Eve
  • December 25: Christmas
  • December 26: Boxing Day
  • December 26-Jan 1: Kwanzaa
  • December 31: New Year’s Eve

Pay special attention to Amazon FBA deadlines, as last-minute changes can occur. Be sure to also keep an eye on the news: supply chain holdups, unexpected press, or other outliers could impact your inventory and sales.

7 Essential Holiday Inventory Planning Tips

To get your inventory in gear ahead of the holiday season, you’ll need to make some important investments. Key areas to consider upgrading include your demand forecasting tools, storage capacity, third-party logistics (3PL), and delivery partners.

Here are seven critical steps to turbocharge your holiday inventory planning efforts.

1. Stock Up Without Bloating Your Inventory

Forecasting isn’t the sexiest task on your to-do list, but knowing your numbers and optimizing your inventory accordingly can make or break your Q4 success. 

With demand more unpredictable than ever, it’s time to drop the manual forecasting work and invest in an inventory planning system that can help you make sense of your sales this holiday season beyond the confines of a messy Excel spreadsheet.

When it comes to seasonal events like Q4, you need to be able to get granular. That means having a thorough understanding of sales velocity, inventory locations, channel costs, return rates, profit margins, and — perhaps most importantly — seasonal demand.

Look for a demand planning and forecasting partner that offers:

  • Accurate replenishment recommendations that account for dozens of variables across sales channels
  • The ability to customize your forecasts to get SKU-level insights
  • An easy way to correct for past stockouts and anomalies (like natural disasters), so you don’t accidentally plan for more each year
  • End-to-end visibility across all sales channels and inventory locations

With the insights you gain from improved forecasting capabilities, you can cut costs by nixing your slowest-moving products. With the extra capital, you can stock up on fast-movers and best-sellers, so you never disappoint your customers — especially not over the holidays.

2. Diversify Your Suppliers

More and more retailers have been diversifying sourcing and production beyond China and the US, or adopting what’s often referred to as a China + 1 strategy.

By sourcing from multiple countries, you can help insure your business against potential disruption. Adding other production hubs to your portfolio can also help you save money, tap into new markets, reduce costs, and contribute to growing economies.

To diversify your supplier network, consider sourcing from:

  • Central and South America: Mexico, Colombia, Brazil, Peru
  • South Central Asia: India, Bangladesh, Turkey
  • Southeast Asia: Malaysia, Indonesia, Thailand, Cambodia, Philippines, Vietnam
  • Eastern Europe: Poland, Hungary

If you’re in the US, sourcing from nearby Latin American countries like Mexico and Peru can mean lower shipping costs and faster transit times, all without navigating communication over huge time zone gaps. It can also mean lower labor costs and reasonable (or no) tariffs. (Plus, if you’re US-based, you probably already have a few Spanish speakers on your team.)

Sourcing from Asian countries like India or Malaysia, on the other hand, could give you access to benefits like more English speakers along your supply chain, stable economic relations, access to new markets, and suppliers with exceptionally strong tech skills.

Working with Eastern European suppliers, while sometimes more expensive or politically/legislatively unpredictable, can mean a well-educated and highly skilled workforce, plus access to new, high-growth potential EU markets.

Whichever countries you choose to add to your supplier portfolio, sourcing from new locales decreases the odds of a single supply chain disruption derailing your holiday season. If you can’t make it happen in time for this Q4, start planning now to get ahead of the game for next year.

3. Ace Your Inventory Storage Plan 

If you’re selling on Amazon, you’ll be contending with ever-changing FBA capacity limits, last-minute receiving deadlines, and increasing storage costs — which can make planning and budgeting for holiday storage a significant challenge.

Here are some tips and tricks for struggle-free Q4 FBA storage:

  • Check those measurements: Selling on Amazon comes with a ton of fees. During the holiday season, the priciest of those can be storage, soaring by nearly triple between October and December. And don’t assume Amazon will get all your measurements right — check each item, and if there’s a discrepancy, open a case, and ask for a re-scan.
  • Keep your sell-through rate high: The better your rate (and, to some extent, your IPI score) the more storage capacity Amazon awards you, so keep a close eye on this and other account health metrics.
  • Go for the “little and often” approach: If it’s an option for your store, aim for smaller, more frequent shipments to Amazon. While it may seem counterintuitive, it can actually wind up being more affordable over the long run.
  • Split stock to play it safe: With Amazon restock limits, inventory caps, and lengthy warehouse drop-off delays to consider, retaining some stock with local and 3PL providers could be a safer bet for holiday sales.

For other sellers — or those who want to make the leap from FBA to FBM — make sure you’re using a reliable, lean, scalable 3PL. If you suspect your numbers could be better, now is the time to start shopping around.

4. Offer Shipping Promises You Can Deliver On

Late, missing, and damaged deliveries can really hurt your reputation as a seller. That’s especially true during Q4, when one mishap can ruin your customers’ holidays (or, some say, their lives). 

Your products need to arrive fast, cheap, and on time. But last-mile fulfillment over the holiday season is tricky. With the number of holiday e-commerce sales steadily increasing each year, everyone is competing for the same warehouses, vehicles, and drivers to help deliver those goods.

With this in mind, here are some tips to help you get ahead (and stay ahead) this holiday season.

  • Cultivate lasting partnerships: When it comes to suppliers, platforms, warehouses, and couriers, you want to know who you’re getting into business with. When you’ve found your perfect partner, be sure to nurture that relationship. You’ll need all the help you can get with special deals, extra volume, and priority shipments.
  • Free vs. fast: A big chunk of Amazon’s success rests on its ability to get most of its products to customers within a couple of days or less. But customers are increasingly willing to wait weeks for more affordable products and lower-cost shipping from marketplaces like Shein and Temu. If you’re struggling to make ultra-fast shipping work, consider giving your customers a trade-off: offer click-and-collect and standard delivery for free or cheap, and charge a premium for express service.
  • Keep communication consistent: Customers are more forgiving when things go wrong if you proactively communicate the issue to them. Invest in options that let your customers track their deliveries in real-time, and high-quality 24-hour customer service (no budget chatbots!).

5. Diversify Your Carriers

In the lead-up to a narrowly averted potential UPS strike that could’ve brought e-commerce to a grinding halt in July 2023, shippers diverted around a million daily packages from the mainstream carrier. 

But retailers and brands were already diversifying their shipping options months before UPS and Teamsters labor negotiations stalled. With hikes and surcharges increasing, and package delays rampant, brands and retailers have begun to realize traditional shipping just isn’t reliable enough.

Lost or delayed packages can kill your reviews and lose you lifelong customers. It’s crucial to have backup plans in place to keep packages moving no matter what happens. 

Here are some alternative shipping options to consider:

  • Use multiple large carriers: If you work with UPS, add FedEx, USPS, or DHL to your list. Or consider regional options or smaller legacy carriers like Pitney Bowes.
  • Look at growing alternative carriers: OnTrac now covers last-mile e-commerce delivery in 31 states and gig-based, tech-heavy Veho has recently announced plans to expand to the Northeast. 
  • Alternative alternatives: The FRONTdoor Collective uses a franchise model to bring together hundreds of small delivery companies, using Canoo’s electric vehicles for last-mile delivery.
  • Buy with Prime: If you’re not on Amazon, you can still take advantage of Amazon’s logistics network. This is a good option if you’ve been relying on major carriers and want to upgrade to Amazon’s often-faster logistics.
  • Delivery services: DoorDash is updating its digital infrastructure to let DTC businesses fulfill local orders. Keep an eye on similar delivery apps to see what they’re offering.

As long as it works well with your business model, any of these options is a good option. The bottom line is to make sure you have at least two distinct delivery options in place to fulfill orders.

One word of caution: Some alternative carriers rely on UPS and other large carriers for a portion of their business. Do your due diligence to ensure you’re not creating a redundant system that’s still vulnerable to delays.

6. Equip and Expand Your Team

The holidays are chaotic. You’ll need to prepare ahead of time to keep things running smoothly. 

Plan ahead to make sure your offices, warehouses, and team members have all the tools they need:

  • Supplies: If you do any of your shipping in-house, make sure your equipment is running properly and order extra packing supplies well ahead of the holidays. Consider whether you’ll need to make any new tech purchases or rentals to accommodate increased sales volume.
  • Create or order holiday packaging inserts: Your customers will appreciate the extra holiday touch. But holiday inserts take time, money, and extra preparation. Start early — as in now — to get designs and printing done in time. If you have the budget, consider switching to more festive packaging options — bonus points if all your holiday packaging extras are environmentally friendly.
  • Get extra help: Whether you hire additional holiday support or outsource to an agency, you’ll need extra hands to get through the uptick in orders, returns, and customer service needs. For non-FBA orders, a solution like Onepilot can take over your holiday customer care, freeing you up to focus on managing your efficiency and making more sales.

7. Secure Funding for Your Holiday Haul

With forecasting, storage, and fulfillment squared away, you need to consider how you’ll fund your holiday inventory. Adopting new technologies, suppliers, carriers, and more takes a willingness to invest in the fullest potential of your company.

However, traditional lenders don’t always understand the unique needs of e-commerce businesses. They often don’t offer the quick turnaround times you need to secure funding ahead of a major sales season. Not to mention the hidden fees, currency conversion charges, and inflexible terms many of them offer.

If you apply for a loan from a traditional lender, there’s almost no chance you’ll see the funds before Q1 of 2024. But with SellersFi, you could get the capital you need almost as fast as if you ordered it on Prime.

At SellersFi, we get flexible cash to you faster, with few restrictions. 

Our complete suite of funding solutions for e-commerce sellers includes:

  • Working Capital: A line of credit you can draw on as needed for holiday inventory purchases, ad campaigns, and more.
  • Amazon Revenue Advance: A way to get your Amazon payouts in as little as 48 hours, instead of waiting up to two weeks.
  • Invoice Flex: Get immediate funding for any invoice and use it to scale your business (or put out holiday fires).
  • Digital Wallet: A borderless payment solution to hold and send money in different currencies, for better rates.
  • Sellers Signals: An analytics tool that tracks your performance and business valuation.

SellersFi solutions are changing the way e-commerce brands grow by giving you the funding you need, on your terms.

With our holistic portfolio of purpose-built e-commerce tools, you could begin prepping for a profitable holiday season as soon as the day after tomorrow.

Think Ahead for Your Best Q4 Yet

To succeed this holiday season, you need a clear and consistent plan to keep your inventory flowing smoothly. That means setting yourself up for success before Q4 hits, instead of reacting on the defensive.

With SellersFi, you can invest in the tools you need to get ahead of supply chain snags, labor issues, and more. Account for every purchase end-to-end, from raw materials to your customer’s snow-covered porch, and watch the sales roll in.

Explore our complete suite of financial solutions to learn more about how our expert team can help you scale. Then register for a free, zero-commitment account to give your growing e-commerce business the gift of smooth holiday sales.

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