Every year, as the winter winds begin to blow, we all start to get excited. No matter what you believe, you know that when the leaves start falling, your holidays are coming soon!
Meanwhile, after adults lie in food comas after Thanksgiving and before children stay up all night waiting for Santa, a vast logistical process unfolds worldwide. Every year, hundreds of billions of dollars of gifts are manufactured and shipped worldwide.
Holiday shipping is immense in scale. With Christmas coming up this week, we’re going to talk about how it all works. What’s it like to work for the biggest store in the world during the holidays? How can a small business survive and thrive during this busy season? And most importantly: how long can you wait before it’s too late for a gift to arrive in time?
We answer all these questions below in today’s post.
In 2016, Amazon alone shipped over a billion gifts for the holidays. Even without reindeer or sleighs, this basically makes them Santa. Coordinating the shipment of all these gifts is no easy task. There are basically two seasons in Amazon’s warehouse – holiday season and preparation for the holiday season!
We’re only slightly exaggerating, you know. Amazon has over 80 fulfillment centers worldwide, and some of these fulfillment centers ship more than a million items PER DAY. During the holidays, the amount of staff in the warehouse doubles to meet shipping demand.
Peak season is about a month long, starting on Black Friday and running through Christmas. The rest of the year? That’s spent planning for the holidays.
If you’ve read enough of our blog, you know that the supply chain operates on a scale of months. That means the peak month for inbound shipments starts as early as late September!
Unsurprisingly, the sales surge between Thanksgiving and Cyber Monday kicks off the holidays. Amazon remains busy throughout the rest of the year, with 2016’s peak delivery day being December 19. That’s a lot of gift-shopping procrastinators!
As big as Amazon is, though, this isn’t the whole store. According to the National Retail Foundation, holiday sales are around $700 billion per year. So what does the holiday season mean for all the other businesses out there in the world like yours?
If you want to have a great holiday shipping season, it helps to plan in advance. Like Amazon, you can plan far in advance to make the most of this short period of rapid sales.
Fortunately, preparing for the holiday shipping season has benefits that will be beneficial long after the holidays wind down. After all, if your business can handle a rush of Black Friday orders, it can handle anything!
On the Shopify blog, they recommend mapping out your shipping process. That is to say, steps in the shipping process such as:
This is definitely a great place to start! However, this advice doesn’t apply to every business. For example, we take care of all those responsibilities on behalf of our clients. What’s left are supply chain responsibilities, which are different and bigger, but which must be really well understood in order to have a successful holiday season.
The supply chain, roughly speaking, includes acquiring raw materials, manufacturing products, arranging transportation of those products to the warehouse, warehousing the products, and finally fulfilling orders.
The exact supply chain needs differ from company to company. However, you need to think of the whole process long before the holidays begin. How many items do you need to the manufacturer and how long will it take to make them? How long will it take to ship them to your warehouse?
The sooner you address these questions, the sooner you can find improvements that will save you time and money!
Running out of inventory, particularly during the holidays, is very frustrating! Long before the holidays begin, work on demand estimation. Figure out how much inventory you will need first, then figure out your supply needs next.
If you’re fulfilling your own orders, that means you need boxes, padded mailers, bubble wrap, labels, packing tape, and a good thermal printer at a minimum. Some fragile items will require more padding, too.
If you don’t think you’ll be able to handle a huge rush of orders on your own for the next holiday season, think about outsourcing fulfillment in September or October before the big rush.
This will likely come as no surprise, but when holiday shipping is in full swing, you might need extra workers around. If you fulfill your own packages, you need extra workers to help pack items, apply postage, and ship them out. Even if you’re not fulfilling your own orders, you probably need help with other aspects of your business such as customer service.
The one thing you want to avoid above all is a frenzied rush because you’re understaffed. That’s frustrating for everyone involved.
Holidays or not, business owners don’t like to think about taking their products back. However, returns, recalls, repairs, refurbishments, and warranties are all a part of doing business. You have to prepare for them.
As many as 20% of eCommerce items are returned, compared to the 8-10% rate experienced by brick-and-mortar stores. In other words, this is not an edge case scenario that seldom comes up. If you ship five items per day, you are likely to see a returned item every day too.
For that reason, you need to think about your reverse logistics processes. What are you going to do when a customer needs to make a return? Will you pay for their shipping? When the product arrives, will you restock it or throw it away? All these questions and others need to be answered before the holiday shipping rush!
The holidays provide a wonderful time for your business to reach people you’d otherwise never be able to. For that reason, you really need to put your best foot forward and be memorable.
Customer experience is important to repeat sales. If your products are being sold online and then given to a recipient who did not purchase the product, as happens with gifts, you have one remaining way to make an impression. That is custom branded packaging!
In a sea of brown packages from UPS, custom boxes stand out and make people remember your brand name. What’s more, people post “unboxing” videos on social media all the time. There’s a certain vicarious joy that comes from watching somebody open a package.
Even if custom packaging is completely out of your price range, though, you still want people to walk away with a good unboxing experience. At a bare minimum, make sure to carefully pack all your packages so they transport safely. If nothing else, this will reduce the number of unhappy people opening broken items on Christmas day.
Every year, postal carriers release holiday shipping deadlines. If you don’t meet the deadline, your customer’s order won’t ship by Christmas – so you need to know when the deadlines are!
If you’re reading this, it’s likely too late to ship a Christmas gift for 2019 without a major upcharge. But if you check out the links below, they’ll give you an idea of what to look out for in the future:
If you’re shopping for someone over the holidays, the same basic principle applies: buy items before the holiday shipping deadlines! If you do that, you’re a lot less likely to see a steep upcharge for priority or express shipping!
When preparing your business for holiday shipping, it helps to look to the biggest company in the world for inspiration: Amazon. If nothing else, the raw efficiency of their processes holds many lessons for small business owners.
Indeed, there are a lot of things you can do to prepare your business for holiday shipping. If you map out your whole supply chain, everything else will become easier. Make sure you have enough supplies and enough workers. Don’t forget about the actual experience of unboxing or the occasional necessity of returns.
Last but not least, don’t forget about the shipping deadlines! Even if you don’t run a business, these are handy to know for your own holiday shipping 🙂