How an earlier Prime Day created new supply chain challenges for brands
An earlier Prime Day is bringing new forecasting and fulfillment challenges for brands that participate in the annual summer sales event.
In March, news broke that Prime Day would be held in June instead of the typical mid-July timing. But it wasn’t until last week that Amazon confirmed the dates of June 23-26.
Mark Becker is the president, CEO and co-founder of G10 Fulfillment, which specializes in Amazon fulfillment and 2-day shipping. He said that the date change wasn’t easy for some brands and manufacturers because they’d already started planning forecasts months ago.
“We’ve all done our planning that it was going to be for July,” he said. “So when we finally found out it was moved up, it was a scramble from all the manufacturers we work with to get us product in time.”
The amount of product that moves around for Prime Day is no small lift: Based on Amazon’s 2022 data, shoppers bought 100,000 items per minute. More recently, the first-ever four-day Prime Day held last July saw record sales and revenue.
Moving to June, then, meant brands had to bring high volumes of inventory to their warehouses earlier than planned. Becker said this could mean higher costs to expedite shipping schedules, as well as hiring more temps to unload containers at the ports in time.
“We work hand in hand with our manufacturers to say, ‘Here’s where you need to hit this week,’” he said. “It really just ramped up the planning to get it all done.”
Once inventory arrives, warehouses can get ahead of Prime Day demand through strategies like kitting. Becker said some companies will “kit to stock,” or box up complementary items — like the accompanying battery for a solar panel — based on past sales patterns. Companies can also shore up operations ahead of time by moving the most popular items to the front of the warehouse, or hiring extra help to pack and ship.
“It’s absolutely imperative that in the planning process, you’re thinking through all of the little things — so that you can pull the labor forward, so that when it’s go time and you’re in Prime Day, you’re just shipping out orders,” he said.
For some brands, Prime Day is just as important a sales event as Black Friday and Cyber Monday, both on Amazon and off. Owlet, the smart baby monitor, sold about 40,000 units last Prime Day, or one every eight seconds. But the planning has to take into account other retailers and DTC operations, as well. Chief revenue officer Jennifer Billington told Modern Retail that the sales event tends to bring a halo effect to other channels around the same time. “It is such a pillar event that it really helps lift brand awareness market-wide for us,” she said.
The earlier schedule for Prime Day meant Owlet did have to move up its timeline. But Billington said the team was ready because it had started planning and getting the product ready in December. It also typically reworks its forecasts in the weeks leading up to an event. “We’ll start prepping with our warehouse and our supply chain team months and months in advance,” she said. “And then we’ll have a forecast out there, and we’ll just keep honing in on that forecast as the event gets closer.”
Beyond past Prime Day and sales event performance, Billington said Owlet looks at current trends, consumer sentiment and buying patterns to help ensure inventory forecasts are as accurate as possible across sales channels. Otherwise, it runs the risk of outselling its forecast.
“That’s happened before,” Billington said. “At the end of the day, we don’t want to ever run out of product with any of our retail partners. So being able to be nimble and be able to provide everything that’s needed to maximize sell-through, but not sell out a product, but also not overload anything out there, is really important to us as we go through this type of event.”
The week in tariffs
- Another round of tariffs of 10-12.5% will apply to imports from 59 countries including Canada, Mexico and China, as well as the European Union. The new duties are the result of a U.S. Trade Representative investigation around forced labor concerns. The New York Times reports the proposed tariffs could hit in July.
- “The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” Ambassador Jamieson Greer said in a news release.
- The administration is enacting the tariffs under Section 301 of the Trade Act of 1974, which gives the government permission to issue tariffs meant to address unfair foreign acts affecting U.S. commerce. Some experts say this means they could have more staying power than the tariffs that the U.S. Supreme Court ruled unconstitutional under the International Emergency Economic Powers Act, or those recently enacted under Section 122.
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