To be successful during the short, high pressure Christmas shopping season this year, ecommerce retailers should plan now to make certain they have the products shoppers want and that they can deliver those products before December 25.
There are a mere 30 shopping days between Black Friday on November 25, 2016 and Christmas Day. Major carriers like UPS, FedEx, and the United States Postal Service will likely recommend that online merchants stop shipping ground packages for Christmas delivery around the middle of December (depending on zone), making free and fast shipping afterwards a potential margin killer in 2016.
The Christmas holiday season has significant potential, if ecommerce owners and managers plan ahead. Here are five suggestions or considerations for your company’s 2016 holiday ecommerce fulfillment plan.
1. Have Your Inventory Ready
For many retailers, August and September are the last opportunities to order products for November and December sales. So start placing those orders.
While there will certainly be opportunities to introduce new products during the Christmas gift-giving season, consider focusing on your best sellers first.
For many ecommerce businesses, this means looking at perhaps the top 20 percent of the products carried and stocking up on these.
This is a good idea for at least two reasons. First, these are your best sellers, and they will likely be your best sellers during the holiday too. Second, if you do not sell through during the holiday season, you know you will be able to sell these staples of your product line in the subsequent months.
2. Consider Third-party Fulfillment Services
Some online retailers will see a significant spike in sales during the weeks leading up to Christmas. So, if orders doubled for one full week, could your business handle the increase without harming customers? What about two weeks?
If you can easily answer affirmatively, carry on. But if that sort of a spike would cause bottlenecks and potential customer service problems, consider placing some of your holiday inventory with a third-party fulfillment service.
These companies often charge a flat rate for packing your order, have very good shipping rates with the major carriers, and may have warehouses in areas of the country that your business does not. These distributed warehouses are golden during the short holiday season. See tip 5, below, for more about taking advantage of well-placed warehouses.
3. Be Ready to Pack
August and September are not only the months to stock up on product inventory, they are also the months to build up an inventory of shipping supplies.
Be certain that you have a sufficient supply of boxes, bags, tape, packing materials, labels, and printer ink.
It can also be a good idea to upgrade some tools like scales, tape guns, and packaging dispensers.
Finally, look at your order processing workflows. If you need to make changes, implement those changes now so that your pickers and packers (even if that is the same person) have time to become familiar with the changes.
4. Hire Now; Consider Nonprofit Organizations
Some ecommerce retailers will need to add fulfillment and warehouse staff for the holidays. A common mistake is to wait too long to add temporary workers and, thus, end up training new employees in the midst of the holiday fulfillment rush.
Instead of waiting, consider hiring temporary employees early, train them, and then give your regular staff vacation opportunities before the big seasonal stampede.
An interesting alternative to hiring temporary employees may be to use nonprofit organizations. For example, high school sports teams, churches, and civic groups will often provide volunteer labor in exchange for a donation to the organization.
This approach, using nonprofits, can be significantly less expensive than hiring temporary employees although it does require a bit more management and a more flexible workflow.
5. Market Locally
One of the advantages of ecommerce is that you can sell to customers just about anywhere.
A small ecommerce business located in Florida can sell to a shopper in Alaska. But during the Christmas rush these long distance relationships can be more difficult to manage. It might take ten days or more for a ground package to make the journey from a warehouse in Jacksonville to a doorstep in Nome.
For the 2016 Christmas season, consider devoting a portion of your marketing to the local area near your warehouse. The idea is to invest marketing dollars aimed at consumers you can reach in two days with a ground service. Thus, you can offer free, two-day shipping all the way through December 22, and still deliver without spending a lot or crushing your margins.
If you use a third-party fulfillment service as mentioned in tip 2, you can also market locally around its warehouse and enjoy a similar benefit.
The suggestion is not to necessarily focus all of your marketing locally, but rather to invest a portion of your promotional budget to nearby shoppers. As Christmas approaches, consider increasing the local focus.