In this episode, Morgan Gilliam, Co-founder and COO of Fiddle talks about getting your inventory and operations ready for Black Friday and other seasonal sales using four crucial strategies and tactics, why you need a plan for each aspect of your supply chain, and how to take advantage of the next wave of buyers after Black Friday.
Listen on Apple Podcasts here or Spotify here.
Transcript
Ken Ojuka: Welcome to the Physical Product Movement, a podcast by Fiddle, we share stories of the world’s most ambitious and exciting physical product brands to help you capitalize on the monumental change in how, why and where consumers buy. I’m your host, Ken Ojuka.
Taylor Howe: Hey, everyone. We’re excited to share the audio recording from another special webinar that we did for our audience. It’s all about getting your inventory and operations ready for black Friday, just like last week. You’ll hear from our COO and co-founder Morgan Gillum. As he talks about four crucial strategies and tactics. Number one, why you need a plan for each aspect of your supply chain. Number two, the benefits of promoting your sale early and often. Number three. Bundles and special packs. Number four, how to take advantage of the next wave of buyers after black Friday. Enjoy the episode.
Morgan Gilliam: All right, guys, we’re going to go ahead and get started.
Morgan Gilliam: Welcome to the webinar from Fiddle. We’re going to be talking about prepping and tips on getting all set up for Black Friday. We know Black Friday last year was crazy with all that’s going on in the world with COVID and supply chain and back orders. We had a taste of it, big time last year, and I think we’re still in some restraints around the world with the supply chain.
Morgan Gilliam: We have a stat here that it was estimated to surge over seven X last year and they’re projecting even more growth this year and online CPG sales. We’re excited to dive in some of the tips that we’re going to be discussing today by putting in a plan to touch on every aspect of the supply chain.
Morgan Gilliam: And then promoting your bundles, your packs, your deals early and trying to get customers to opt in for alerts. As you get these opt-ins, you can help determine forecasting and projections when we’re getting closer to Black Friday and Cyber Monday. Then we’ll go into bundles and special packs and how that comes into play in your supply chain and how we can help you get some tips on attracting that.
Morgan Gilliam: And then the next wave. Cyber Monday and Black Friday are a great time to increase sales and really just blow it out of the water. But then all of December is that month to really capitalize as well. When we talk about having a plan, we’re going to talk about all the different parts of the supply chain. So several of our clients and several of these CPG brands out there are sourcing the packaging and the raw ingredients from the suppliers.
Morgan Gilliam: So there’s a timeline and everything associated with that. And then that’s going perhaps to a co-packer that’s going to total it and package it and get it all ready and provide the finished goods that goes into a 3PL. As you’re working with a 3PL maybe there’s a bunch of pick pack and ship type processes that come into play, especially during Black Friday when you’re bundling and when you’re adding variety packs and special offers across all your products. And so these are a couple of things that we’re gonna touch on and it just comes down to, do you have processes in place with your partners, your co-packer and your 3PL? Are those dialed in or are you leaving it up to them just to get the job done?
Morgan Gilliam: In our experience, we know that you will be much better off if you were working with them on processes, timelines and understanding, not just pricing, not just expenses, but actually how things are happening over there at the different locations. We advise you to actually sit down with your co-packer now and talk about Black Friday production.
Morgan Gilliam: Obviously you’re going to get one to get it done way in advance. So we typically say, if you can get ready in a couple of weeks, all finished. Good, done, and added and shipped over to your 3PL prior to your Black Friday online sales, then you’re set up for success on that channel.
Morgan Gilliam: Obviously, if you have distributors, if you have stores, you have to get those in time, get them shelved and get them lined up so they can get the product out to their customers. So there’s different channels, but here I’m going to focus on if you’re owning Shopify, WooCommerce, BigCommerce, a platform, and your 3PLs fulfilling a big promotion during Black Friday.
Morgan Gilliam: So you’re going to want to sit down with them and say, all right, I need this amount of product produced and made and ready and out the door. Sheets to my 3PL November 1st or November 10th. But what’s you could approach them about, especially if you’re growing, especially if you’re doing quite a bit with your co-packer and you’re on a growth trajectory, is are they willing to go ahead and start producing more in case you run out of stock and you’ve been start pre-orders during Black Friday or Cyber Monday?
Morgan Gilliam: And what that’s going to do is you already have the raw goods over there to do more of the run. And then they’re going to go ahead and produce some of it during those two weeks when you’re just out marketing, promoting and doing all your social posts and everything to promote your deals. And so let’s say you just go through the roof on Black Friday, and then you’re like, oh, Cyber Monday, we’re going to run out of products.
Morgan Gilliam: You can reach out to them and say, Hey, you have, can you have items and reserve finished, good level that you can just shoot over to 3PL? And then maybe negotiate terms, right? If you can show last year’s amounts that you did all the growth through the year and then your new trajectory for this coming, then maybe they’ll give you a little better terms.
Morgan Gilliam: Now when you’re sourcing packaging and raw ingredients and materials and everything for getting those items to produce. It’s really good to understand lead times. So you may have standard lead times if maybe a week, two weeks, two months. Hopefully it’s not that long.
Morgan Gilliam: And if it is, we advise to try to find a way to source a little more so that if you run out over Black Friday, then you can actually be able to produce over December. But remember, many of these suppliers and co-packers and raw ingredients are working with tons of brands. And they’re all trying to grow. They’re all trying to get their Black Friday product in. So go ahead and give them a call, have a conversation with them, understand that if] you order this amount, can they give you terms? And then what’s the reorder points during the holiday season look like? Does it increase on lead times and know those numbers?
Morgan Gilliam: Don’t leave it to assume that the lead time, if it’s three days, is going to be three days in November or December. It may jump up. They may be back ordered. And in that case, go ahead and try to find backup suppliers. Second and third option. I can’t tell you how many of our clients and people we’ve talked to we’re in a bad position because they never aligned up backup suppliers, ingredient, packaging suppliers, to go in and get orders from when they’re their main one ran out back ordered, or there were some supply chain issues. So always be finding those second and third options. We think this is a great opportunity to improve the supply chain.
Morgan Gilliam: One of the most successful companies that we’ve chatted with recently, was Traeger Grills. And I mentioned them in the last webinar, but they dialed in their supply chain so well that they were able to grow and hold just a little amount of inventory so that the cash isn’t tied up.
Morgan Gilliam: If you’re holding tons and tons of inventory, your cash flow is tied up. So take this opportunity to work with your suppliers, work with their co-packers and see if you can shave off a couple of days or weeks, and then you’ll have more cash to do more. And your lead times won’t be as long to hold onto that inventory.
Morgan Gilliam: Again, communicate, understand how your co-packer and your sourcing your suppliers understand your plan. If you’re really trying to push into a new growth trajectory so that you’re on the same page. Now notify any kind of special packaging, special bundles, packs with your 3PL.
Morgan Gilliam: This is vital. If you’re going to send special packaging, special inserts, promo deals, offers within your packaging, make sure your 3PL and you are on the exact same page. Again, we advise don’t leave these things up to them, just to assume that they’re going to do what you’ve asked by email, get on the phone, chat with them, maybe visit them, and put together an execution plan.
Morgan Gilliam: If you’re going from a hundred units a day or fifty thousand units a day, and you think over the week of Black Friday and Cyber Monday, you’re going to go to four or 500,000 units a day. Then you need to make sure that your two pills have the staff and the shifts to manage all these sales. So talk to them, ask them about it and ask them during this time, is there a shipping rate breakdown?
Morgan Gilliam: That would be where you can actually cut your margins and help save a little money and make a little more profits during this time. Obviously you’re getting great deals for your customers. Is there a way that on the back end that you can maybe cut, save some money during this time?
Morgan Gilliam: So again, chat with them, especially if you’re growing month over month. And they see that you’re just continuing to grow. Maybe you’re a co-packer or your 3PL would be willing to give you some better terms and pricing. We’re gonna get into a bit of the marketing options here.
Morgan Gilliam: So when you’re promoting for Black Friday, obviously everybody’s going to do it a week, two weeks to write before Black Friday. But if you have a big subscriber list or a big following, go ahead and get these deals out early and have people opt in to the price alerts. This has been proven that you can get more sales and generate more during this time, if you can get people to opt in to the special deals.
Morgan Gilliam: And one thing that we’ve seen is like segment your lists, right? If you have] certain buyers that have bought the bundles, then make sure that you’re promoting a bundle offer for them during this time. If a certain segment of your clients have bought just one type of SKU, a certain flavor, make sure you’re offering that to these customers, they’re going to get bombarded with emails, bombarded with social posts, about deals and alerts and new products, new bundles.
Morgan Gilliam: And you want to help them feel special. Like you know them, you are grateful for them. And so it’s a great email and opt-in strategy. Then you want to make sure during this time that you have customer support, if this is asking family and friends to join, you do a bit a training, but just to make sure that they feel good about buying and getting the deal, if anything happens with their order or there’s a hiccup in the ordering process, especially on the mobile side, you want to be able to respond to chats, or have people within your company respond.
Morgan Gilliam: So mobile friendly. What’s interesting is the mobile-like movement, as we all know, we all do everything on mobile. But the buying, like you would think that people during Black Friday would just jump on their computer because they’ve gotten the deals and know what they want to buy.
Morgan Gilliam: But what we’re seeing is tons of them are on social media or getting hit up by their favorite brands and companies and buying right there. So make sure that processes seem seamless for them. And there’s no hiccups. Okay. So again, encourage people to sign up for the deal alerts and opt them in to different parts based on what they’ve thought make them feel special and help them understand that this isn’t a universal offer. This is a special offer for them and they feel connected to the brand. For the customer service that we just talked about and then mobile friendly is going to be an advantage if you’re all dialed in. And here’s the little stat that over half of Christmas revenue in 2020 was from smartphones.
Morgan Gilliam: Based on what Adobe said. And then here’s just more of your millennials, love buying on phones, right? It’s that? That’s now an Instagram on TikTok buying right from there and going in having a seamless process. This is an interesting thing. If you think you’re going to sell out, which is not always a bad thing.
Morgan Gilliam: Again, inventory equals cash. If you’re holding a ton of inventory, because you’re hoping for tons and tons of sales and it’s not necessarily aligned with your growth, but you think you can just push. And you don’t sell it. It’s gonna hurt the business. It’s gonna hurt the cash flow. So if you want to hold a little less inventory and you plan on selling out, like that’s your plan, have pages to get people to pre-order and have a timeline to fulfill on those pre-orders.
Morgan Gilliam: And so create a landing page, a website that is customized to the out of stock. Feeling when people are like, oh man, I missed the deal, but then offer the deal and say, Hey, we can get this out to you. Instead of two to three days, it’s going to be two or three weeks. If you can do that with your timelines, with your co-packer and your 3PL.
Morgan Gilliam: This is a great advantage that a lot of companies will not take advantage of. They will just throw out of stock on their Shopify, WooCommerce, and then leave it at that. So again, creative landing pages or websites to add a little more kind of customization and brand to create brand loyalty.
Morgan Gilliam: So we’re going to get into the financial part, right? Hopefully you all have some really good history in some of your softwares or spreadsheets from your sales last year. And what I want you to look at. It’s not just Cyber Monday and black Friday, but look at October, November, the two big days, and then December.
Morgan Gilliam: This way, you can understand what you did in those months. And if you have a certain growth trajectory over the last eight months where you need to be at for your numbers, and hopefully you’re doing this pretty often, and this isn’t something out of the ordinary for you. But if you’re gonna throw out another channel, if you’re working with distributors and online sales, then you just need to understand these numbers and understand a really good forecast on projector projection.
Morgan Gilliam: So understand that month growth over, if you’re doing 10% growth, 20% growth, 50% growth month over month since January, and that’s pretty standard. And then you’re going to do the same thing September, October, November, December. Understand those numbers and then understand where you think you can go on Cyber Monday and Black Friday.
Morgan Gilliam: And take out promotional or seasonal deals that may have changed that month over month growth, but take that number right. And then understand, all right, we’re going to grow 10 to 20% over the next four months. So here’s the amount of inventory I need. I’m going to do a huge deal.
Morgan Gilliam: That makes sense for my company that has good margins still. And I think I’m going to grow, I’m going to sell an extra couple thousand units. In on black Friday and cyber Monday between the two, but not only am I going to do that, I’m going to roll out a promo a week later for those that miss the deal, that’s almost comparable and I’m going to sell another five or a hundred, but do this chart like to this actual.
Morgan Gilliam: Tracking and reporting and then going forward with a plan. And again, it’s okay. If you do run out of stock, maybe not so much okay. On Amazon, but for your own fulfillment, your own Shopify or WooCommerce store, it’s okay. As long as you have things in place during this time to make your customers feel good about your products.
Morgan Gilliam: Now, you’re gonna want to make sure you’re improving that flow and lead times and honing in on it. If your lead times have been extra long, maybe this is the time to speak with your suppliers and co-packers to say, Hey look, I understand COVID. I understand, containers have been sitting at ports or on the ocean because there’s not enough truckers to deliver them across the country. I understand these things are getting worked out.
Morgan Gilliam: I think four months ago, 60% of the capacity of boats were coming into port. And then now it’s back up to 80, 90%, hopefully, and COVID doesn’t get in that way. And we are at the full capacity of freight and containers coming into the United States before the holidays.
Morgan Gilliam: The key to really being successful as a brand and growing is getting that lead time as short as possible, understanding cash flow and being able to predict as much as you can on sales. Okay. So bundles and packs. This is interesting because if you’re not tracking bundles properly, they’re going to throw an error and what you’re depleting.
Morgan Gilliam: And if you’re selling a bundle with maybe four flavors, but then you have two flavors over here that are sold individually that are the best products. The issue is you may not be able to do bundles because you’re going to sell out of these two products. So one nice thing is to work with your co-packer or your 3PL depending on who’s doing it and pre-package bundles so you can detriment those bestseller from inventory when you just selling those units. And so maybe you say, I’m going to go ahead and pre-package a couple of thousand of my variety packs, cause I’m doing a big promo on those and then you’ll know, okay, I still have my best sellers. I have a couple of thousand of each single units and then I can reorder and get replenished by December 5th if I sell out. So understand any kind of packs or bundles that you’re going to do, work with your co-packer or a 3PL on who is in charge of those. And again, if you’re doing special packaging, special inserts for the holidays. Work with your three PL to make sure that they’re, detrimentally, all of that you’re tracking your COGS, you’re tracking your costs for each one of those items and that it all makes sense on the financials.
Morgan Gilliam: I think for what I really want to hone in during this whole webinar, is that the communication between your partners and you is vital. We love to say that it’s not a supply chain. It’s actually a supply network without your partner’s fulfillment producing. It’s not gonna work.
Morgan Gilliam: A lot of brands don’t have the capabilities of fulfilling or making the product on their own. So work with them. Get on the same page and you’ll be successful. So the next wave is, it’s just we want to talk about the fact that there’s a ton of opportunity to get new clients and sell more right after the holidays.
Morgan Gilliam: So people want to see the deals they miss out. People want to see what the hack, products, and trends were. Obviously do your Black Friday promos do your Cyber Monday promos, but then afterwards have some decent amount of marketing spend, ad spend to go and get discovered.
Morgan Gilliam: People are going to be looking at these trends, looking at what one of the best sellers is, why they were the best. That is why people are buying this protein bar versus that one over these holidays. And you’re going to be able to find a lot of new customers this way, if you’re promoting during this time.
Morgan Gilliam: Facebook likes to call it discovery commerce. And it’s just, they have guides. They’ve built out on how to push this out on Instagram, Facebook, and then obviously you want to use the other platform to spark interest. December is a great time to do more promos, obviously post-Christmas, leading up to Christmas, and then into the new year. If you have products that are healthy and help people get fit and when they’re setting their goals.
Morgan Gilliam: So for me, it’s interesting, cause you want to get your deals and your price alerts and all that out early so that your followers can engage. And they know what kind of deal they’re going to get on black Friday, but then the post black Friday and all this time, when you got to have your fulfillment dialed in.
Morgan Gilliam: If you have it dialed in with it’s repellent and co-packer prior, and you’re not having to worry about that, then what you can focus on is additional sales, lead gen and tracking new customers. And so again, dialing that supply chain with your 3PL with your co-packer. So there’s not a worry, you’re all on the same page, you know how to reorder, how to refill and replenish, and then you can go and discover new clients in December.
Morgan Gilliam: Okay. So quick, short, webinar today for you guys hope you enjoyed it. We do have our own Black Friday promo that we’re doing in September, where you get 50% off the monthly subscription all the way up to the end of the year for Fiddle. I hope this was helpful. Feel free to reach out to us.
Morgan Gilliam: I’m Morgan again at Fiddle. And we’d love to talk to you if anybody has any questions, would love to chat about that. And go through it. If there’s anybody there that would like to go into that, if not, we’ll go ahead and end. And you can always email us or chat with us on our homepage. All right guys, take care!
Ken Ojuka: Physical Product Movement Podcast is brought to you by Fiddle. To find out more about Fiddle and how our industry leading inventory ops platform is giving modern brands and manufacturers full visibility into their inventory and operations. Visit fiddle.io, and then make sure to search for Physical Product Movement in Apple Podcasts, Spotify, Google Podcasts, or anywhere else podcasts are found. Make sure to click Subscribe. So you don’t miss any future episodes on behalf of the team here at Fiddle. Thanks for listening.
