BFCM 2020: What NOT to do for your eCommerce business
October 1st, 2020
By: Chad Lio & Tim Jordan
Chad Lio is the Marketing Director for SellersFunding and an eCommerce Marketer. He’s generated millions of dollars of revenue working with top eCommerce and DTC brands within the supplements and education space.
Tim Jordan is the Chief Growth Officer for SellersFunding, and host of the AM PM Podcast. Tim is also a keynote speaker for multiple eCommerce driven events specifically on how to find the next profitable product to sell.
BFCM 2020 will be one for the ages...but knowing what NOT to do will be crucial to your success.
It’s officially October 1st and as sellers or eCommerce businesses, we all know what that means: Q4.
Without a doubt, Q4 2020 will be the largest surge of eCommerce sales in history.
Within a span of three months, we have Amazon Prime Day, Black Friday, Cyber Monday, and the holiday shopping season (not to mention significantly increased eCommerce sales due to COVID-19).
Needless to say, it’s the three most important months of your entire eCommerce business.
The Perfect Storm
We continuously try to grow as sellers and prepare for maximum revenue in Q4, while being bombarded with tons of content, strategies, offers, software, and services to help our online sales grow for Black Friday/Cyber Monday.
While many of these tactics are helpful, MANY are not.
As we get ready for these large sales days, the above-mentioned scenarios combine to form the perfect storm: The sales potential is SUPER high, but so is the list of advice and solutions we are being offered to “crush our sales”.
But as we stated, a lot of these methods are just fluff and junk.
In this article, Chad Lio (Marketing Director at Sellersfunding and DTC eCommerce Strategist) and Tim Jordan (Chief Growth Officer at SellersFunding and Amazon Seller Extraordinaire) collaborated to discuss the things we as sellers should NOT be doing going into these hot sales days.
Some of their ideas and opinions will NOT be shared by large influencers, schools of thoughts, and even the sales platforms themselves… But hear us out, and decide for yourself what you will do in your own strategy!
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Table of Contents
Amazon BFCM Tip #1: Don't increase your PPC bids on these days
Every year, days before big sales holidays, Amazon fill up our inboxes with guidance.
I have even seen VERY specific instructions stating things like “increase your daily spend budget and bid per PPC click by 50%”.
Their surface-level reasoning is correct: If everyone is competing more those days, then you better spend more to occupy the same amount of positioning on pages for your chosen keywords.
We can’t afford to let our COMPETITION take all those sales, CAN WE?
My opinion is actually different… do NOT adjust your PPC.
I do this for a lot of reasons, but the MAIN one that I have found to be the case in the past couple of years, is that EVERYONE in my niches and categories jack up their bids, but not always their daily spend limit.
They just don’t think about it!
So this means that they RUN OUT OF BUDGET early on in the day… So we know that more e-com sales happen in the later half of the day, so why would you want to blow out your budget early?
Let your competitors do that, then take advantage of the sales on cheaper clicks a little later in the day.
Also, remember that you have limited inventory!
I will get into this more later, but most of us don’t have an and less supply of inventory, and I would rather keep my sales stable day to day, while holding page position long term, than DECREASING my profitability with higher PPC cost, just to risk stocking out earlier.
DTC/Website BFCM Tip #1: Don't offer a discount on a single product
When it comes to profitability in eCommerce, a big portion comes from your ability to increase your number of sales without increasing (or potentially even decreasing) your customer acquisition cost.
One of the most effective ways to do this is increasing your A.O.V. (Average Order Value).
With a surge of incoming traffic hitting your website because they are looking for some sort of BFCM deal, most eCommerce companies will offer some sort of % off the total order or specific products.
Example: BFCM Deal! 30% off your total order!
Instead, you should consider bundling multiple products together as a BFCM package, and discounting that bundle.
While it’s still the deal that your customers were looking for, your average order significantly increases allowing for more profitability.
I see this happen way too often with eCommerce websites, and then they wonder why they didn’t profit as much as they should have during BFCM.
The discounted bundle approach is much more desirable for both your customers and your bottom line.
They get some sort of deal that they were expecting and your A.O.V. increases because it is the focal product of your holiday promotion.
Keep in mind, a holiday product bundle should be comprised of one of your most popular products, paired with one (or multiple) complimentary products that low sales volume and are just eating up inventory capital that you could be spending elsewhere to grow.
Amazon BFCM Tip #2: Inventory Isn't Unlimited
Maintaining rank for a specific keyword depends on a lot of factors.
Although the vast majority of the attention to “ranking” in the past few years has focused on things like review farming, giveaways, and algorithm hacks… the vast majority of the power to “rank” now is based on good ole traditional sales methods.
On Amazon, this means simply this: having a product people are searching for, offering it at a fair price, and creating a high conversion rate (meaning a high number of people that view your product purchases your product).
So if you have limited inventory, remember that doing HUGE pushes on sales holidays can have detrimental impact to your ability to rank if you stock out!
Here is a scenario:
-It is Oct 1, and you are out of time to order more products from China and have them landed safely in FBA prior to the end of the year. You have 4,000 units, that’s it.
-Now lets assume that over the past 90 days, you were averaging 40 units sold per day. That means that, with 4,000 units, you should last till the end of the year when hopefully you have new stock in place.
-Now, remember that most people sales will AUTOMATICALLY INCREASE in Q4 and on those holidays, even without adjustments! So for simple math’s sake, now you just shortened your in-stock window…… uh oh.
You will run out of stock now around December 10th. At your same price, and without increasing your Cost Per Click.
-So now you decide to run rebates, coupons, heavily discounted deals, MORE ppc on those special selling days…. You stock out MUCH faster, and make less money…..
So I have to ask, what was the point?
And I know some of you are gonna say “hey Tim, we wont run out of inventory! We have tons of stock! Then I would applaud you, and STILL suggest that you let your competition do the things listed above, run out of stock, then YOU have tons of inventory to sell with less competition.
In my experience, I have seen more than 50% of my top competitors stock out BEFORE DEC 10th EVERY year…. It never fails. I lose my competition, and I make more. Inventory matters!
DTC/Website BFCM Tip #2: Focus On Scaling Remarketing, Not Top Of Funnel
This actually pairs along with not increasing your PPC budgets on Amazon as mentioned earlier.
Did you know the highest cart abandonment rate happens during BFCM?
If you decide to increase your paid acquisition campaigns to target top of the funnel or cold traffic, odds are your conversion rate will drop significantly.
Potential customers probably haven’t heard from your company prior to the start of BFCM, so they are unsure if they want to purchase at first touchpoint.
Instead, double down on your remarketing and retargeting and open up an opportunity to convert customers if they left without purchasing.
Make sure to not only have these campaigns in place for your paid acquisition channels, but also for your email cart abandonment campaigns.
When it comes to BFCM, customers are bombarded with promotions throughout multiple days.
Their attention is scattered not only between what deals they can get from their favorite brands, but also purchasing on sites for friends or relatives that they don’t regularly visit.
It’s very easy to get distracted and abandon their cart and completely forgot about buying directly from your store, so it’s crucial to scale your remarketing to make sure you’re targeting them across multiple channels and devices.
Its’s unfeasible to think that just because customers are more primed to buy on BFCM, that your conversion rate will increase.
Amazon BFCM Tip #3: Don't Expect Your Highest Sales To Date
I remember my first big year of selling, 2016.
We had launched our own private label products that year, and we applied MONTHS in advance to be featured in an Amazon Lightning deal.
We got our spot featured at around 2pm EST, and a discount of 25%. But we also raised our price up by about 30% prior to the sale, so we were STILL selling at the same price!
We made a ton of money that day, AND ranked our products substantially in just a few hours.
But, alas…. That was 2016.
Now, tens of THOUSANDS of sellers run lighting deals, daily deals, and other rebates or heavy discounts on the big sales holidays.
All this means is that there are LESS eyeballs on your products, and you get washed away in the onslaught of killer deals!
So, what’s the point?
The effectiveness is wearing off…
In addition, over the past couple of years, the BIG brands have noticed that Amazon sales peak on these days.
This means that MASSIVE budgets by huge names are spent on the prime advertising locations.
So if I am selling a pair of athletic shorts, and I used to be able to get great exposure on these days, but now Under Armor is paying MUCH more than I am to take the same spots, who is going to buy my no-name brand?
It just doesn’t add up…. The effectiveness has gone down the toilet…..
This was a great method when it was limited, but now that everyone can get in, the luster is not quite as bright!
DTC/Website BFCM Tip #3: Don't send a general promotion to your entire list
One of the biggest mistakes you can make when emailing your customers about your BFCM promotions is not segmenting your email list and tailoring the promotion to past purchasing history.
We all know that it’s easier to sell to someone who has previously purchased from you before.
But customers that frequently buy from your business or even month-over-month should be treated as royalty, thus a different promotion should be sent to them vs. one time customers.
Maybe it’s a larger sized discounted bundle, mentioned in our first tip. Or potentially it’s triple the amount of reward points that they would receive on a normal purchase.
Whatever the promotion is, it should be specific to your highest valued customers who spend the most money.
It’s no secret that your most frequent customers are more than just customers…they are extensions of your brand.
So why aren’t you communicating to them differently?
There’s nothing more disappointing as a loyal customer of your favorite brand (who you spend a lot of money with) to be treated like everyone else.
So spend the time to think about your most important customers and how you can offer something to them that’s not available to everyone and watch your conversion rates soar.
As An Experienced Seller, Knowing What NOT To Do Is More Important
As an experienced seller or eCommerce business, you need advice and strategies that build upon the processes that you’ve already capitalized on.
By knowing what NOT to do, you can skip all the nonsense and focus in on what is going to make you the most profitable for BFCM 2020.