- Create a redundancy plan with your shipping strategy
- Factor in shipping surcharges
- Incentivize customers to buy and ship early
- Revisit your packaging to streamlined fulfillment and reduced cost
- Prepare special kits and product bundles to increase AOV
- Expect shipping delays, part shortages, supply chain bottlenecks
This is one of a four-part series on how to prepare for Q4.
1 Build a Solid Shipping Strategy
Create a Redundancy Plan
Customers hate when their packages don’t get to the final destination on time, especially with a special holiday to aim for. Ensure your products get delivered on time by creating a backup shipping plan. If this holiday season is anything like last year’s, some carriers will struggle more than others to get your packages out quickly and reach your customers on-time. In order to ensure packages get to customers during a surge, it’s advisable to have a relationship with a backup carrier. You never know where or when issues will arise. If you can easily shift from one carrier to another in the event of any problems, you and your customers will be happy.
Prepare for Surcharges
Shipping costs will go up during Q4. That’s a fact. The major carriers continue to add surcharges as shipping volumes continue to climb. Sellers should be prepared for these additional costs and have a strategy to deal with them. Will you absorb the costs? Or pass the costs to customers?
Incentivize Early Shipping
There were crazy shipping delays between Black Friday and Christmas in 2020. If you can offer sales early, customers will be incentivized to order and ship early. Last year not all sellers took this advice, and the ones who didn’t were stuck with a lot of angry customers with delayed packages.
2 Get Your Orders In Line
Understand Your Capacity Needs
One of the best pieces of advice you can take when planning for the holidays is to understand your capacity and communicate it to partners.
Forecasting is incredibly important. First, get a great forecasting model. Then, communicate your needs with your 3PL, suppliers, and any other partners who need to know. Update them often with any changes in your forecast. Your fulfillment provider will then be able to let you know what is feasible in regards to daily and weekly output.
The communication with your 3PL shouldn’t stop at forecasting. It should be a two-way conversation. Questions you should be asking your fulfillment provider:
- When are your facilities open? Are there any planned closure days?
- Are there additional fees for shipping on “off” days?
- What are your plans to mitigate any volume surge issues? (labor or warehouse space)
- Are there any contingency plans to be aware of?
Rethink Your Packaging
With so many variables during the holidays (surges, shipping delays, warehouse backups) you don’t want anything to slow your products down. If you work toward simplifying your packaging materials during the summer months, you won’t have to worry about any last minute decisions or issues during the holidays.
Oh, you also want a stellar unboxing experience for customers? While it’s great branding, it can create bottlenecks on the fulfillment side of things, especially during a surge. Talk to your fulfillment provider about ways to add a special feel to your packing materials without slowing things down. Your 3PL will know what works with their automation systems, and what will ultimately save you on costs.
3 Plan Holiday Specials
Does your 3PL provide value-added services like kitting? They should! Kitting is when a few items are bundled together to create a unique SKU. Kitting is often used for made-to-order products, items that need light assembly, as well as subscription boxes. Work with your 3PL during the summer to plan a few pre-built holiday kits. By bundling products you’ll likely increase your average order value (AOV) and improve your shopping cart conversion rate.
Another way to increase conversion and average order value (AOV) is to add gift options for your customers. There are a few different paths to go with, but you have to plan them in advance.
- Gift wrapping: offer customers the opportunity to get their products wrapped for simple giving. It costs a little bit extra for customers, but that will add to your bottom line.
- Messages: Amazon has made offering custom messaging the norm. Let people submit a customized gift message to be sent with the product for a small additional cost.
Check out our case study on the increased revenue and customer satisfaction Aftershokz saw after adding gift messages for the holidays.
Spread Out Your Sales
Traditionally the biggest shopping days of the year are Black Friday (actually the full Thanksgiving weekend) and Cyber Monday (actually now the full week, starting on Cyber Monday). Many sellers chose to spread their sales out, not only clustered around this typical sales week. This can balance out their operations, give customers more options, and net more sales volume by offering more than one single promotion.
Consider offering sales at a few points during Q4 to give your customers a bit more time to take advantage of special sales.
4 Solidify New Opportunities
It’s important to take advantage of the right markets now so that you can capitalize on them during the holidays. Q4 is not the season to launch into new markets, but the summer is. If you work hard at growing new opportunities now, it will pay off during times of bigger volume.
Work with your 3PL now to figure out what the best next steps are for your brand. Want to get into new retail channels? Launch your Amazon storefront? Expanding your DTC customer base? Or grow your sales abroad?
Take the time now to set up your new integrations properly now. At DCL we work with great industry partners who integrate with our fulfillment methods to help our customers grow. For example, our partnership with international shipping carrier, Passport provides our customers a seamless way to get compliance support and turnkey DDP solutions.
5 Set Reasonable Expectations
To recap, there is a lot of planning needed to ensure your holiday season fulfillment goes as smoothly as possible. This must be done in tandem with your fulfillment partners to get on the same page with the people who will be executing your strategy.
Consumers spent $861 billion in online sales in 2020, that’s a 40% increase from years prior. It’s expected the industry will continue to be at pre-pandemic levels again this year. The supply chain is under a lot of pressure and there will inevitably be delays. Partner with your 3PL to get visibility and work with them to set proper expectations with your customers.
A Holiday Preparation Checklist for Sellers
- Expect delays—online shopping is expected to increase again this year.
- Create a shipping redundancy plan—have a secondary carrier in place in case of issues.
- Prepare for shipping surcharges to be added to your usual shipping costs.
- Simplify packaging and packing materials to limit friction during surges.
- Put together a holiday promotion strategy that spreads out your sales.
- Build a plan to incentivize your customers to buy and ship early to beat the surges.
- Work with your 3PL to create pre-built kits or bundled products.
- Look into specialized holiday customizations like gift wrapping or customized messages.
- Create accurate forecasts for all your supply chain partners.
- Set up key integrations now—new sales channels, retailers, or international markets.
- Communicate! Let your 3PL know your needs, and develop a communications plan to set realistic delivery expectations for your customers.
If you need a 3PL to help you make the most of the holiday season, reach out to chat with our team. Last year we helped many of our clients employ these strategies and others to ensure the smoothest fulfillment possible.