5 tips for a profitable peak season

The 2022 holiday season is set to drive more than $260 billion in ecommerce sales this year, per Deloitte. Is your brand ready for the rush?As peak season picks up, here are five tips to maximize your success that, when implemented, can boost sales beyond the holiday spike and into 2023.

1. Share forecasts with partners as early as possible

Communicate accurate Q4 plans and forecasts with your partners as early as possible to maintain operational efficiency through peak season.While the holiday season ushers in major revenue spikes for many brands, those offering products that see steady sales volume year-round may think they don’t need to worry about sharing seasonal forecasts. Think again!Your business might not be seasonal, but your suppliers, vendors, and partners businesses certainly are. They’re likely working with multiple brands and products that will need extra attention around the holidays, and the added work could cause unexpected disruption to your operations.Help your partners, including manufacturers, fulfillment providers, and delivery services, plan ahead to make informed capacity planning decisions as far in advance as possible by sharing up-to-date inventory and order forecasts.

2. Communicate cutoffs with customers

Determine carriers’ ground shipping cutoff dates and use them as both a goalpost for sales and a critical touchpoint with consumers.All shipping carriers publish a cutoff date – usually between Dec. 16-18 – after which orders cannot be guaranteed to arrive by Christmas. Identify the date your preferred carrier has established, and work backwards to create a merchandising and communication plan.With an eye on the cutoff date, you can run better, more specific promotions to drive sales. Frequent, repetitive communication creates urgency for shoppers and pushes transactions up earlier in the month, giving you more time and flexibility to ensure orders arrive in time to make it under the tree. Peak season starts earlier and earlier each year, but even still, there’s a relatively short window for holiday promotions. Taking cutoffs into account, the majority of seasonal sales should be recognized well before December 25.

3. Create redundancy in your supply chain

Identify the single points of failure within your supply chain and make a redundancy plan to avoid delays.As business and consumers around the world experienced during the pandemic, kinks in a supply chain can have an outsize impact on an entire operation. A single warehouse, closed with little notice due to a Covid exposure, could (and did) lead to weeks or even months of delay for consumers down the line.Heading into the holiday season, warehouses and fulfillment centers will reach peak capacity, and carriers will see higher than average delivery volumes. If you don’t have a plan in place, you could get stuck in a bottleneck and lose out on peak season revenues.Examine your supply chain – vendors, warehouses, fulfillment centers, transportation providers, etc. – and seek to create redundancy at critical junctures. This could mean ensuring that inventory is distributed across multiple fulfillment centers, or contracting with multiple shipping carriers so you don’t get stuck if rate limits are imposed. Eliminating single points of failure means your operations will continue to run, even if disruptions occur.

4. Budget wisely for Q4 increases

Prices for everything from storage to shipping to labor will increase in Q4. It’s inevitable, and rather than be surprised, budget in advance for added costs.The added volume that peak season drives ups costs across the industry. Every major carrier will implement potentially significant peak season surcharges, up to a few dollars per shipment, and even Amazon will for the first time ever implement a holiday peak fulfillment fee upon third-party sellers. You can also expect labor costs and overtime fees to increase from October to January.To mitigate these price increases, work with providers and ask what can be done in terms of negotiation. There’s usually room for partners to make deals, especially if you approach them early. Fulfillment providers in particular may be a source of relief when it comes to increased prices. Most aggregate shipment volume with certain carriers, giving them more leverage on rates.With proper financial modeling, there should be no surprises come Q4.

5. Seek partners that can support scale

Now is the time to identify partners that can support your brand’s scale, during Q4 and beyond.Peak season is a stressful time for any business selling a product online, as well as for the supply chain partners that support them. With sophisticated software and management systems available to optimize operations, this is not the time to rely on Excel. How are your vendors managing operations?Consider the systems you and your partners have in place to support you during holiday sales spikes, and beyond into next year. Do they have programs in place that provide inventory visibility and order management control? What warehouse management system are they running?It would be a nightmare if one day you saw an incredible uptick in sales, only to learn that poor process led to double shipments of all those orders. The time to align with the right partners and software systems is now, not when you’re experiencing your peak.To find out how Flowspace can help you find peak Q4 success, get in touch.