Amazon delivery delays across the world are at an all-time high, and they’re likely to stay that way for a while. Add in the demand spike that always comes with the holiday season and it’s safe to say it’s going to be a tight squeeze for fulfillment.
The winter season is a critical time of year for many Amazon sellers and small business owners. But the current state of shipping delays could mean your Amazon business is already feeling the pinch, and your customers are looking to shop elsewhere this year.
Shipment networks are already congested due to a record level of imports caused by supply and demand shocks, factory closures, global shipping restrictions, an infamous canal blockage, and the ongoing COVID-19 pandemic. It’s safe to say our supply chain is in overdrive, and it’s causing a backlog.
The interconnected nature of global shipping means that these delivery delays are often compounding each other, creating an elongating line of delays. It’s predicted these supply chain issues could continue well into fall 2022.
If you’re an Amazon seller, these delays are likely to force your online store to sink or swim. To keep yourself afloat, it’s imperative that you understand how to mitigate these delivery delays with strategic logistics.
In this article, we’ll explore some of the main concerns around Amazon delivery delays, why you need to prioritize on-time deliveries, and how to build a strategic logistics process that will prevent delays from negatively impacting your business.
- How delivery delays impact Amazon sellers
- The importance of on-time deliveries on Amazon
- How to arrange your logistics strategically to avoid delays on Amazon
- Wrapping up: Mitigate your Amazon delivery delays with strategic logistics
How delivery delays impact Amazon sellers
Delivery delays can seriously hurt your Amazon store. The consequences affect not only you as a seller, but also your warehouse team and, ultimately, your end customers.
To begin with, it’s a good practice to familiarize yourself with the different ways delivery delays will impact your Amazon store (“Know thy enemy,” as Sun Tzu put it). Before we look at the steps you can take to strategically mitigate delays, let’s first explore their ugly side. There are four main negative consequences that you need to be aware of.
1. Frustrated customers will take their business elsewhere
On the consumer side of the shopping experience, customers are increasingly frustrated by slow shipping times. When searching for products on Amazon, there is a clearly stated delivery time, so if you can’t compete with other sellers, shoppers are unlikely to even click through to your product listing.
As Amazon shipping delays have been common for a while now, customers are likely to be alert to sellers that are unable to deliver their products in a reasonable timeframe. Nobody wants to wait longer than necessary for their order to arrive, and the longer the shipping delay, the more frustrated your customers will be.
Therefore, time is of the essence when it comes to online shopping, particularly on Amazon. Customers will see your long delivery times and take their business elsewhere, opting to shop with competitors who can ship their requested items immediately.
2. Advertisers will reconsider their Amazon advertising strategies
Any adverse effects on your sales resulting from shipping delays may cause advertisers to rethink their strategies. After all, there’s little point in spending money on Amazon PPC ads and driving demand to product listings that are out of stock.
When they’re working well, Amazon ads are a powerful way to drive traffic and revenue for your Amazon store. Conversely, if ad budget is pulled from your store, your visibility will drop, further impeding your store’s performance.
And on Amazon, you can’t rely on your strong organic rankings alone, as a drop in ad traffic will impact KPIs that have a knock-on effect on where your products appear in the unpaid search results.
3. Order backlogs put you at risk of losing your account
If you’re waiting on stock deliveries while keeping product listings live, it could cause a backlog of orders. Similarly, if you sell more products than you have stock available, you’ll wind up unable to fulfill your orders.
Neither scenario is good for your Amazon store. Amazon expects sellers to ship orders as quickly as possible. Providing consumers with fast shipping is one of the cornerstones of Amazon’s success, so there is little tolerance of sellers who don’t meet their shipping commitments.
If your store continually ships orders after the expected date, it’ll hurt your Late Shipment Rate, which Amazon tracks for every seller. To continue selling on Amazon, you need to maintain a Late Shipment Rate of 4% or less. If your Late Shipment Rate goes above 4%, you risk having your Amazon account deactivated.
4. Out-of-stock products can lower store performance
Amazon delivery delays could cause inventory issues if you’re unable to replenish stock fast enough to keep up with product demand.
As an Amazon seller, a store full of out-of-stock products is bad for business. During the time your products are out of stock, your listings will disappear from the Amazon search results and keyword rankings will drop. This will affect how much traffic your site earns, meaning even fewer potential customers will see your store.
So what can you do to ensure you always have enough stock to meet expected sales? Read on for tips on your logistics setup.
The importance of on-time deliveries on Amazon
The speed of your order fulfillment plays a major role in customer satisfaction. Once an order is placed, the clock starts ticking to get items to their end destination as soon as possible. In shipping, faster is better for your business. On-time deliveries keep your customers happy and accelerate your store performance.
No stock means no profit
If you don’t have any products to sell, you won’t make any money. As such, it’s important to get your items into warehouses quickly so they’re ready to sell. The sooner your inventory reaches a warehouse, the sooner you can set your listings live.
For this reason, we don’t recommend following Just-In-Time (JIT) inventory management strategies. While JIT inventory management might seem lucrative for your cash flow, it’s risky when shipping times are slow or unreliable. If you’re unable to replenish warehouse stock before products sell out, your store profits will take a hit.
Increase your market share while your competitors scramble
Prioritizing on-time deliveries could help your Amazon store to gain market share.
While the current global shipping delays are worrisome for all eCommerce owners, there can be an upside. If you have a healthy supply chain and warehouses filled with stock, this is your time to shine. Amazon sellers with healthy supply chains can capture a greater market share with their in-stock product listings. Meanwhile, your competitors who are scrambling to resupply will see their listings disappear from the search results and their market shares diminish.
Satisfy consumer expectations of fast, reliable Amazon deliveries
In a world that encourages instant gratification, buyers expect to receive their online orders as quickly as possible. They want two-day or next-day shipping, and they want it fast.
It’s your duty as an Amazon seller to manage on-time deliveries so you can satisfy customer expectations of fast, reliable delivery times.
You have two options to achieve this. You can keep items stocked in warehouses, ready to sell and ship. However, this can be challenging for Amazon sellers who have a million other things to keep track of, so another option is to make use of fulfillment partners. A fulfillment partner can speed up the process of getting items to buyers as soon as they place an order.
How to arrange your logistics strategically to avoid delays on Amazon
The logistics behind your Amazon store are ultimately responsible for its success. Developing crystal-clear logistical processes will simplify your sales operations and accelerate growth.
Always have stock on hand
One of the best ways to avoid delays is to have enough stock in warehouses at all times so you don’t need to worry about running out.
Order stock and keep it close by. Having a warehouse team manage stock flow as it comes in from suppliers and goes out to fulfillment centers or end customers will help maintain smooth logistics.
As mentioned earlier, Just-In-Time strategies have no place when delivery risks loom. Switching to perpetual inventory management will give you a real-time overview of how much stock you hold, while also automating reorder processes.
Forecasting is your friend, and so are intelligent prediction tools
Forecasting your inventory levels and expected sales will help you predict when you’ll need to reorder stock throughout the year.
Invest in intelligent prediction tools to understand inventory and order forecasts for your Amazon store. Then, order earlier than the forecasted dates to mitigate the risk of delivery delays.
Tip: Add a three-month buffer to your inventory reordering to make sure you never run out of products in the face of supply chain issues.
Diversify your suppliers on Amazon
Don’t rely on only one supplier. Doing so puts the future of your Amazon store in the hands of one company. It’s a disaster waiting to happen.
Instead, diversify your suppliers to make sure you have multiple fallbacks in case one of them is hit with delivery issues or is unable to fulfill your order. It’s a simple risk management strategy you’ll be thankful you implemented if and when supply chain issues arise.
When establishing your supply chains, it’s a good idea to choose suppliers from different regions. Having a broad network of suppliers across various geographical locations will shorten shipment times and allow you to cover more areas. Also, if one supplier is experiencing delays, it could be for factors outside their control that are likely affecting other suppliers from the same region.
You should also build a network of local suppliers, or suppliers close to areas where your warehouses are located. Nearby sources can reduce delivery times and lower the risk of unexpected delays when ordering inventory from suppliers.
Strategically distribute local inventory
One of our best-kept secrets to mitigating and avoiding delays due to delivery or supply chain issues is to spread out your local inventory strategically.
Instead of hoarding it in one location, aim to disperse your inventory across various warehouses near consumer hotspots. This reduces the distance orders need to travel before reaching the end customer, so your products will arrive as quickly as possible. MyFBAPrep has prep warehouses strategically located across the U.S. to help streamline the shipping process for Amazon sellers.
Wrapping up: Mitigate your Amazon delivery delays with strategic logistics
The best way to avoid delivery delays is to plan for them carefully, so that even when issues arise that are beyond your control, your business is well prepared to pick up the slack. Optimize your logistics processes for risk management, and you shouldn’t have to worry about delays harming your business.
On the contrary, you can even profit from global shipping delays. Maintaining on-time deliveries will allow your Amazon store to dominate the market at times when your competitors are struggling. As for your customers, they’ll recognize you as a seller with reliable stock levels and fast delivery times, encouraging repeat orders, positive reviews and overall brand loyalty.
If you can mitigate the risk of delivery delays, you’re likely to boost your Amazon store’s conversion rates, increase rankings, and amplify your revenue.