Q4 is the most important sales period of the year; depending on what your store offers, most sellers can expect a 2%–70% boost in sales for the period. In 2023, U.S. eCommerce sales saw an increase in revenue from $268.745 billion in Q3 to $322.862 billion in Q4 eCommerce revenue, matching a five-year trend of a 20%–25% rise in sales over the last quarter.

That heightened Q4 eCommerce sales velocity makes it critical to go into the end of the year prepared, which requires understanding your market, estimated sales increases, and how to prep inventory to reduce potential bottlenecks, backorders, and other issues. This Q4 eCommerce preparation will reduce costs while ensuring your business provides a great customer experience, even when supply chains bottleneck and your postal carriers are overwhelmed with goods.

Q4 eCommerce: Forecast sales

Sales forecasting is one of the most important steps in predicting stock needs for Q4. Understanding prospective Q4 eCommerce sales enables you to scale up your volume adequately, predict demand for gift sets and bundles, distribute inventory logically, and pre-empt supply chain bottlenecks. To forecast sales:

• Compile historical sales data for the period, preferably on a month-to-month basis.
• Check previous increases and trends for them, month to month, from Q3 to Q4.
• Assess the rate of Q4 eCommerce sales increase between this year and current or historical data years.
• Consider influencing factors like new markets, promotions, pricing changes, new products, etc.

Ideally, you should have an inventory management solution that allows you to pull up these trends quickly, using real-time data. Otherwise, you’ll want to run several calculations to look at trends over time, including per product, region, and marketplace.

Stay on top of key sales dates for Q4 eCommerce

Note that the previously mentioned 20%–25% uptick in Q4 eCommerce sales is often restricted to a few key dates, with Black Friday and the start of the holiday season being the most important.

However, you must understand how your sales align with these and other major dates so you can prepare enough inventory for them. That involves creating a holiday marketing calendar as well as staying on top of your product demand across the period.

See important shipping dates in Q4 here.

Review your needs with your 3PL

Once you know what your demand is likely to be, you can start to prepare with your 3PL. Align on likely sales volume, pick-and-pack needs, and more. Key points on Q4 eCommerce to discuss with your 3PL include:

• Inventory and demand: Inform your 3PL if you plan to increase inventory volume.
• Packaging needs: If you’re changing packaging for the holidays, prepare your 3PL to ensure uniformity.
• Geographic distribution: Some products sell better in different areas. Try to align inventory distribution with actual sales trends.
• Promotions: Alert your 3PL of any upcoming promotions so they know when to expect a surge in fulfillment.

Your 3PL will have to scale up their staff to accommodate increases in stocking and replenishment, pick and pack, and inventory management. If they have an idea of what predicted Q4 eCommerce sales are, they can do this more easily and guarantee to meet demand. Your 3PL probably has plans in place to increase staff for the period, but creating a touch point and conversation means everyone is on the same page.

See: How to build strong relationships with your logistics providers

Order early and have inventory in place on time

Q4 eCommerce is famous for increases in sales and resulting bottlenecks in shipping and distribution. So, it’s in your best interest to order stock as early as possible. For example, Amazon doesn’t accept FBA inventory for holiday sales, including Black Friday, after October 19, so you’ll need your full Q4 eCommerce inventory in place before the middle of the month.

Consider adopting a similar approach for your off-Amazon sales. If you have a rough idea of what you’re going to sell over the period, ordering that amount up front could save you from stocking out. Evaluate the risks of:

• Running out of inventory if supply chain delays prevent delivery
• Overstocking and carrying over large amounts of inventory into Q1
• The cost of warehousing versus the cost of reorder and resupply
• Lead time to resupply products, plus maximum potential delay
• Timeline to prep products for sales (e.g., if it takes 72 hours to label and repackage products moving into your warehouse, you need to add that to lead times)

If you have a safety margin for products, have worked out any expected or potential delays with suppliers, and maintain a buffer for lead times, you may be able to get away with not overstocking goods. However, you could end up overstocking if you’re unsure whether resupply or shipping will be available when you start to run low.

Leverage bundling and kitting for Q4 eCommerce

Bundles and kits are a great way to move old inventory and increase average shopping cart values. Discuss options with your 3PL partner; you can either prep bundles and kits on an as-ordered basis or ready more up front based on expected sales volume. That entails working out whether the goods in bundles and kits will sell individually over the period, how long your 3PL needs to prep products for bundles and kits, and what the risks of split inventory are.

It’s best to prep holiday bundles and gift packages well in advance to ensure you have the manpower and materials available to handle them. You allocate a defined amount of inventory to bundles and kits; then, when you sell out, you can package new kits on demand.

Get ready for returns

The average return rate hovers between 5% and 10% for physical stores and 15% to 40% for online sellers, depending on product category, with some like clothing and shoes seeing an astounding 30%–40%.

Even if your Q4 eCommerce sales skyrocket, those rates won’t go down. Instead, you’ll see peaks of returns all at once, typically following major sales days (Black Friday/Cyber Monday) and after Christmas. So, you should take steps to improve your reverse logistics and reduce the cost of returns for this period. That can include:

• Offering prepaid return shipping labels via your 3PL so you don’t have to provide customer support to enable returns
• Having your 3PL set up automatic inspection and QA to sort returned products into disposal, resale, or repair
• Ensuring you have customer service channels set up to handle increased demand for product information, repair, replacement, etc.

It’s crucial to develop a plan to reincorporate Q4 eCommerce returned goods into your inventory that’s efficient and cost-effective. Work with your 3PL partner to construct a robust process in advance.

Additional resources

How to Structure Your Returns Process For Seamless Operations

Reverse Logistics Best Practices to Make Returns Your Competitive Advantage

Eco-friendly Returns

How to Reduce Amazon Returns

Wrapping up — Ready your business for the Q4 eCommerce surge

Q4 eCommerce could yield a massive boost in sales for your business or barely cause a noticeable uptick. While you can’t see the future, you can make reliable predictions and act accordingly. To give your brand the greatest chance of a bountiful final quarter, review sales trends, make plans based on expected sales velocity, and have the necessary inventory and personnel in place.