It’s that time of year again: Black Friday and Cyber Monday are just around the corner.
Hopefully, you’re prepared well, with adequate liability insurance and a well-stocked warehouse. It’s never too early to double-check that all the boxes have been checked, no matter how organized you are. As the countdown to the two busiest shopping days of the year begins, let’s look at the three biggest pitfalls that eCommerce sellers face and how to avoid them.
But first, some facts about Black Friday and Cyber Monday sales.
Black Friday and Cyber Monday are two of the most important days of the year for eCommerce sellers. Last year, 88 million Americans spent $8.9 billion on Black Friday shopping online.
Cyber Monday, which occurs three days after Black Friday, is an even more enticing prospect: Consumers spent $10.7 billion on Cyber Monday last year, with a peak of $12 million spent every minute during the busiest hour (11 pm-12 am ET / 8 pm-9 pm PT).
With that level of consumer spending available, eCommerce sellers who get these two dates correct can enjoy windfall profits, easily elevating revenue comfortably into the black, and starting to build their brand further in 2023.
But that doesn’t mean it’ll be easy.
Let’s look at three of the most common holiday blunders and how you can avoid them this season.
1. Lack of Adequate Insurance:
Insurance isn’t glamorous, which makes it easy to overlook, but it’s critical. If a customer makes a successful claim against you, not having the right eCommerce insurance in place (or worse, none at all!) can easily wipe out an eCommerce seller’s entire business.
Because accidents can happen no matter how careful you are to ensure your product is safe, Amazon now requires vendors to have Amazon seller insurance in place if their monthly sales exceed $10,000. Amazon must be named as an “additionally insured” party in the policy, and the policy must provide at least $1,000,000 in coverage.
A good policy should adequately cover you if a customer is injured or their property is damaged as a result of a product you sold them. The cost of the policy will be determined by two major factors.
The first consideration is the likelihood of your products causing damage. Some products are more hazardous than others. Anything with an electronic component, for example, has the potential to malfunction and start a fire, whereas a knitted toy is probably safe.
The second factor is the number of units of each product sold (also known as ‘exposure’). If the chances of an accident occurring as a result of your product are one in a million, it is unlikely to occur if you sell one, ten, or even 100 units. Chances are it will if you sell a million. This is why, at this time of year, having the right insurance in place is critical, because as your sales increase, so does your exposure.
2. Improper Inventory Management:
Nothing is more annoying than having customers on your site who want to buy but are thwarted by ‘out-of-stock tags all over your product range. Out-of-stock tags were up 8% on Cyber Monday last year compared to the previous week (November 22). However, when compared to 2020 figures, they were up 169 percent, and a staggering 258 percent when compared to 2019 figures. This suggests that the pandemic has had a significant impact on supply chains, a problem that has yet to be fully resolved.
Historically, eCommerce sellers calculated their safety stock,’ or the amount of excess stock they should keep in reserve, using the following formula:
Maximum daily unit purchases X maximum product production time = safety stock
While that is still a good rule of thumb, keep in close contact with your suppliers so that you can plan for any delays they may experience as a result of supply chain disruption.
When planning your Black Friday/Cyber Monday sales, don’t forget about packaging, right down to having enough tissue paper, stickers, or tape to package your products to the standard the customer expects. There is only one thing more frustrating than running out of stock: running out of boxes in which to ship the product.
3. Failure to Establish Trust:
With so many consumers looking for new companies and products to delight them and their loved ones, Black Friday / Cyber Monday is an ideal time to collect and convert new leads.
First impressions are important, and this is true for eCommerce sales as well. Online shoppers are becoming more aware of the potential pitfalls of online shopping. Those new leads will be on the lookout for scams, which unfortunately abound at this time of year, as well as any indications that your product might disappoint. After all, they can go to your competitors’ websites with a single click.
Create instant trust with new customers by prominently displaying product reviews and testimonials on each product page and your main page, giving potential customers confidence that what they see on the screen is what will arrive on their doorstep.
You can also build trust ahead of time by running a targeted social media campaign in the lead-up to Black Friday/Cyber Monday. Invite loyal customers to send in photos of themselves using your product or testimonials for use on social media.
Better yet, create a community of loyal customers who can serve as holiday ambassadors ahead of time. Facebook groups are an excellent way to get everyone talking – and generate excitement about new products before they go on sale.