The day after Thanksgiving, known as Black Friday, kicks off the holiday shopping season and is consistently the biggest sales day of the year for retailers. This surge in consumer spending also brings a rising tide of deductions that Amazon issues to its sellers and vendors.
With the high volume of orders around Black Friday, it's very common for deduction rates to spike significantly as well. If sellers aren't thoroughly prepared and equipped to handle the major influx of deductions, these chargebacks can quickly eat into profits and put a large strain on working capital.
In this post, we'll break down some of the best practices and proven strategies for managing extremely high deduction volumes during the holiday sales rush. Implementing standardized processes and automation is key for vendors looking to minimize revenue lost to deductions and actually try to come out ahead financially during the most critical and lucrative sales season of the year.
Surging Deductions During Peak Holiday Season
As a vendor, you can expect to receive a significant increase in orders from Amazon in the weeks leading up to the Cyber Monday and Black Friday holiday shopping season. This surge in orders often leads to an increase in deductions and chargebacks that vendors must manage. Being aware of the most common types of deductions can help you properly prepare:
- Pricing Deductions: These deductions often result from discrepancies in pricing agreements and may involve discounts or promotions not properly honored.
- Shortage Deductions: Retailers may assert deductions when there are discrepancies between the ordered quantities and the goods actually received, citing shortages.
- Compliance Chargebacks: Retailers may impose chargebacks for non-compliance with their specific requirements or guidelines, covering various aspects of product quality, labeling, or shipping.
Implementing Best Practices for Managing High Volume
Having standardized procedures and utilizing automation are two of the most important strategies for successfully handling high deduction volumes during periods of surging holiday sales and orders. Here are some deduction management best practices to follow:
- Use deduction management software - This technology can instantly track deductions and provide timely alerts so vendors can take action within Amazon's short 15-day resolution window. Key features like automated reconciliation of deduction reason codes also optimize efficiency.
- Coordinate cross-functional teams - Collaboration between finance, operations, inventory, and customer service departments allows for alignment of deduction management processes. This cross-functional insight helps drive informed decision-making when resolving chargeback disputes.
- Act urgently on all deductions - Amazon will penalize sellers who consistently miss response deadlines for open deductions. Have processes to ensure you respond to and resolve all deductions in the Amazon Vendor Central portal within 14 days or less.
- Analyze root causes - Look for patterns in deduction reason codes, order information, and product identifiers to spot recurring issues. This data reveals problem areas, like high return rates for certain items, that require further investigation and intervention.
- Dispute invalid deductions - Don't be afraid to thoroughly investigate chargeback evidence and push back on unreasonable or erroneous deductions that lack proper supporting details from Amazon. Be ready to provide strong evidence and documentation.
By taking this type of strategic approach, brands can turn deduction management into a true competitive advantage during the immensely important Black Friday and Cyber Monday sales crunch. Although implementing standardized procedures well before volume spikes is ideal, it's never too late to start the process and make continual improvements. The key is having the right systems, personnel, and mindset in place ahead of time.
Introducing Best-In-Class Deduction Management Software- iNymbus
What if I told you that all the best practices mentioned above could be seamlessly handled by one software? That's right; iNymbus, with its cutting-edge RPA technology, can automate your entire deduction management process, end to end. Let's explore how it accomplishes this:
- Detection: iNymbus can swiftly detect when a deduction is issued and, using predefined criteria, categorize its validity.
- Dispute Resolution: In cases where the deduction is considered invalid, iNymbus possesses the knowledge of the necessary documents required to initiate the dispute process.
- Document Retrieval and Upload: But iNymbus doesn't stop there. It can efficiently retrieve these essential documents from various sources, be it shipping portals or EDI databases, and seamlessly upload these documents to Amazon Vendor Central.
Embracing automation not only saves significant man-hours but also offers exclusive benefits such as:
- Cost Reduction: iNymbus delivers a remarkable cost reduction of 80-90% per claim, making deduction management a cost-effective process.
- Comprehensive Coverage: iNymbus empowers you to cover 100% of all claims, a feat that may not have been achievable through manual management alone.
- Data Analysis: With its advanced data analysis capabilities, iNymbus efficiently identifies the root causes of deductions, providing valuable insights to resolve issues at their source.
- High Volume Management: iNymbus' impressive speed, being 30 times faster, allows you to effectively manage high volumes of deductions, ensuring no deduction goes unaddressed during peak periods.
The concentrated surge of Black Friday and Cyber Monday transactions set the tone for the entire holiday shopping season. Without sufficient control and optimization of deduction management, brands can see profitability immediately strained right out of the gate just when sales volumes are highest. However, those sellers who smartly invest time and resources into improving their deduction management operations can often actually see increased profitability during the most crucial sales period of the year.
This holiday season, don't let deductions negatively affect your potential profitability. Follow these best practices for high-volume deductions, and let iNymbus be the gift that keeps on giving your business needed financial gains long past the new year.