This Issue's TLDR...

• Q4 hacks on how to defend against black hats, how to circumvent Prime Exclusive Discount requirements, how to pick up cheap sales from weaker competitors, and how to stretch your UGC budget.
• Oh, and there's bonus hack that explains how to monitor and steal your competitors' emails.
• Cash flow management in Q4 is especially important. My Twitter friend Dave has some recommendations.

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BEST from Me

We're on the verge of Q4, so, as a follow-on to last week's newsletter on Q4 Capacity Limits, I'm dropping 4 quick Q4 hacks.

Fair warning: These hacks are...uncommon.

But that's the point of this newsletter.

I'm not here to drone on about the same "Q4 Best Practices" that 99% of other blogs, newsletters, webinars, and experts talk about.

This newsletter is for the Top 1%, so you get the Top 1% of ideas and information.

Let's go!

Hack 1: Set Unusual Quantity Limits

A common black hat tactic in Q4 is to tie up your inventory. The ways of doing this have evolved (and I'm not going ot get into them, because I don't like to propagate bad behavior), but suffice it to say, you can do a couple things to leave yourself less exposed.

First and foremost, be aware that there's a specific abuse reporting workflow for this.

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And second...Set quantity limits on customer purchases.

There's a bit of art and psychology to this.

Because, on the one hand, you don't want to NOT have legitimate bulk orders!

But, also, if you keep the floodgates open, a competitor can repeatedly tie up your inventory, quite easily.

So, my approach here is to set moderately high, unusual quantity limits that are just above my historical bulk order that represents the 80th percentile in terms of order size.

Example: If, across all my YTD bulk orders, the order quantity at the 80th percentile was 25 units, I'm going to set my Q4 quantity limit at 27 units.

Why 27 units?

In part, because it ensures that my order limit is still high enough to capture 80% of my historical, legitimate bulk orders.

But, more importantly, because it's now a honeypot for black hats.

Any number of Chrome extensions will reveal a product's quantity limits. And, of course, the most likely attack involves a black hat creating an order at the full limit amount.

By setting a order quantity that is both statistically rare and unusual in amount (real bulk buyers are people, and people tend to think in round numbers ending in 0 or 5), I can immediately detect when something is amiss.

Hack #2: New SKU for PEDs

Most people don't know this, but discount guardrails for Prime Exclusive Discounts are assessed at the SKU level. NOT the ASIN level.

On the one hand, Amazon Seller Central help says:

But, relevant to this little hack, Amazon Seller Central help also says:

There's a contradiction here.

The low price guardrail is assessed at the ASIN level. But the discount threshold that Amazon enforces is at the offer level (i.e., SKU level).

This little idiosyncrasy opens up an opportunity for me not to take a bath when running PEDs and trying to abide by the PED requirements.

The way I take advantage of this is, roughly 4 weeks prior to a marquee event, I'll create a new "event SKU" solely for an event day PED, and then send inventory to FBA against that SKU (but still using manufacturer barcode).

When I'm setting up my PEDs, I'll then use my "event SKU" so that I can check the box on the >20% discount, without having to discount against a lower Your Price or Sale Price that I might have offered on my normal SKU.

Hack #3: Fight Weaker Opponents

Launching a new product on Amazon is tough.

In some ways, I'm sympathetic to the new launches. After all, I launch 8-20 new products per year, so I have to endure the anxiety and torture associated with new launches regularly.

But, at the same time, if I see a new product entering my terrain...I'm coming after you. (in a white hat way)

They way I like to pick on the new kids is to monitor the "New Releases" in my product's category or sub-category.

I then set up day-parted Sponsored Display product targeting campaigns and have an active coupon on my own ASIN(s).

Typically, with a) the higher review count of my ASIN and b) the coupon badge, I'll win sales from the New Release, even if the newly released ASIN has an aggressive launch pricing strategy.

(And, even if they do, this is where the day-parting comes in: I'm going to bleed their PPC budget early in the day and win sales in the evenings, when traffic is typically higher)

Hack #4: Stretch Your UGC Budget

I love stretching the value of a dollar in all aspects of my life. And, I take this to an extreme in Q4.

Right now, with JoinBrands, I can get 10 Amazon Shoppable Videos (i.e., Amazon Influencer videos) for $30 each.

Once the videos roll in, I'm going to run all of them through EZgif and cut up the content into still images and gifs, which I then use on my brand's social media and Amazon Posts.

For Instagram Stories and Reels, I'll cut up and re-purpose the videos using Opus Clip, which is an AI-based tool that converts videos into short form clips, auto-captions them, and scores them based on estimated virality.

BONUS Hack: Steal From Your Competitors

If you're a brand that competes with big, omni-channel brands, they are likely doing a healthy amount of email marketing.

Use Owletter to automatically capture all emails sent from a brand to their mailing list.

Even better, it takes a screenshot, stores it and analyzes it, and alerts you...only if the email is important.

Use this to pre-empt competitor promotions or, my personal favorite -- just steal their hooks and messaging.

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BEST from Everyone Else

Some Q4 cash flow management tips from my Twitter friend, Dave Rekuc:

(If you don't know by now, cash flow is my love language)

Some quick cash management tips for those feeling the Q4 purchasing crunch. Specifically for folks feeling the cash crunch, but don't have great financing options to turn to.

CC limits - if you are going to have to pay down a card mid-month during spending peaks, go get more credit asap. Ramp, highbeam, ampla. All offer 1.5% cash back, non-personally-guaranteed cards. You can apply to all 3 or play them off one another for increased limits.

Line of credit (not fixed fee) - Highbeam, Ampla, and Sellersfunding all offer true lines of credit for an APR, not a fixed fee like a merchant cash advance (MCA). I know Highbeam and Ampla are in the ballpark of your monthly average revenue for last 6 months in line size. That's pretty generous without personal guarantees.

Just in time inventory - Manufacturers hate small orders. They dislike generous payment terms. They're reasonably open to a blanket PO, then ship me the goods and invoice me as I need them. Especially things like boxes or packaging. JIT inventory increases turnover and reduces holding costs.

CC with vendors - If you do have room on your cards, you should have at least a 1.5-2% cash-back card. Agree to pay a 2% fee in exchange for putting your goods on a card rather than cash (provided you can't get better terms with them). A 0.5% fee for 30-40 days is a great EIR for a small brand.

Merchant cash advance (MCA) - if you absolutely have to do it, make sure you negotiate a minimum payback period. That can greatly affect the EIR of the loan. If you're using MCA money and aren't sure you're going to sell out of the inventory, then buy less. Which leads me to.

Buy less inventory - you need enough inventory so it's possible for your contribution margin (CM) to cover your operating expenses (OpEx) and turn a decent profit. But, over-ordering can kill a business. Under-ordering is rarely a death blow. When you under-order, you can increase the price or the MER or both and just enjoy a higher CM. All things considered, if I'm tight on cash I'd rather have 20% too little inventory to meet the full demand than 20% too much.

Plan to rebuild stock post Q4 - most businesses build up inventory prior to Q4 (net working capital increases), then they sell off a lot or all of that inventory in Q4 (net working capital greatly decreases). Late Q4 into Q1, don't forget to plan to return to normal levels of inventory and leave cash available for that climb back up the NWC hill.

I actually like Dave's recommendation to buy less inventory.

I know, I know.

"But Jon, haven't you gone on record in the past saying that the #1 rule of Amazon is don't go out of stock?"

Yes, I have.

But, businesses die from indigestion all the time.

Consider:

A) You can over-order for Q4, take a profit hit (due to promos and discounts) on each unit sold, and still end up heavy on inventory heading into Q1 (when traffic will be less, so you'll likely still be discounting inventory).

OR

B) You can under-order for Q4, hold your price point, turn off PPC to slow unit sales, and, if you do go out of stock in, e.g., December, suffer through a few weeks of OOS and then pump sales in Q1 through PPC, when CPCs will be cheaper. (Worth noting here that OOS periods of 1-3 weeks are typically unburdensome to recover from)

Unless you have deep pockets, Path B is probably the safer bet.

Updates to the Amazon Private Label Pathway

Since the topic of this newsletter issue was Q4, I thought I would double down on that topic. I've added a video that runs through the Top 3 Competitor Attacks to Watch Out for in Q4.

Stay safe out there.

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Back Story on the Amazon Private Label Pathway, ICYMI...

A few months back, I had a small group of coaching clients that were at the same point in their Amazon seller journeys.

I found myself answering the same questions, and pointing them to the same resources, so, in true Amazon fashion, I asked myself "What's the 1-to-Many solution here?" and built a Notion page of helpful resources, which I've called "Amazon Private Label Pathway."

You can get access to it here: https://auxo.gumroad.com/l/amazonpathway (it's free; but if you want to buy me a beer, I won't object)​

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Amazon Questions? Amazon isn't easy. Everyone needs a little help from a friend sometimes. If you ever have a tough Amazon question, I'm only a phone call away. Let's Chat

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