The period from January through March is when smart Amazon brands separate themselves from the rest. While most sellers coast after the holiday rush, the brands that execute a deliberate post-holiday strategy maintain momentum and set themselves up for a strong year. At Marknology, Andrew Morgans and our Kansas City team have developed a proven Q1 recovery playbook that keeps our clients growing when competitors are sleeping.
Table of Contents
The Q1 Opportunity Most Brands Miss
January through March is not a dead period on Amazon. It is an opportunity in disguise:
- Lower CPCs: Advertising costs drop 20-40% as competitors reduce spend, making it the most efficient time to advertise
- Gift card spending: Billions in Amazon gift cards are redeemed in January and February
- New Year resolutions: Fitness, health, organization, and self-improvement categories surge
- Tax refund season: Starting in February, tax refunds drive significant purchasing
- Reduced competition: Sellers who "take a break" after Q4 create opportunities for those who stay active
Q1 is when you build the foundation for the rest of the year. The data from Q4, the customers acquired during the holidays, and the lower advertising costs create a perfect storm for strategic brands. - Andrew Morgans, Marknology
Post-Holiday Inventory Management
Effective inventory management after the holidays prevents costly mistakes:
Excess Inventory
- Identify aged inventory: Products sitting in FBA for 180+ days will incur long-term storage fees
- Amazon Outlet: List excess inventory on Amazon Outlet for discounted clearance
- Lightning Deals: Run deals to move excess stock quickly
- Removal orders: For products that will not sell, submit removal orders before February's long-term storage fee assessment
- Multi-channel liquidation: Consider selling excess inventory through other channels
Replenishment Planning
- Analyze Q4 sell-through rates to calibrate Q1 replenishment
- Identify which products maintained velocity after the holidays (these are your evergreen winners)
- Begin ordering for spring and early summer products
Marknology's 3PL warehouse in Kansas City provides flexible inventory management that helps brands right-size their FBA inventory and avoid costly storage fees.
Handling Returns and Refunds
Post-holiday returns are inevitable. Here is how to manage them effectively:
- Monitor return rates: Track returns by ASIN to identify products with quality or expectation issues
- Analyze return reasons: Amazon provides return reason codes. Use this data to improve listings and reduce future returns.
- Update listings: If customers are returning due to sizing, feature confusion, or unmet expectations, update your listings to set better expectations
- Returned inventory inspection: Check that returned items are being properly evaluated. Unfulfillable returns may need removal orders.
- Customer service: Proactive communication with customers who leave negative feedback after returns can sometimes resolve issues
A 15-20% return rate during January is normal for many categories. The goal is not to eliminate returns but to learn from them and minimize preventable returns going forward.
Advertising Strategy Reset
Q1 is the perfect time to rebuild and optimize your advertising strategy:
Campaign Audit
- Review all campaigns from Q4 for performance insights
- Pause or archive underperforming campaigns
- Identify winning keywords and audiences to build upon
Budget Reallocation
- Reduce overall spend by 30-40% from Q4 levels (not to zero)
- Shift budget to highest-ROAS campaigns
- Take advantage of lower CPCs to test new keywords and targeting
New Campaign Testing
- Launch Sponsored Brands Video campaigns (video is increasingly important)
- Test Sponsored Display retargeting for holiday shoppers
- Experiment with DSP for brands with sufficient budget
At Marknology, we use Q1 as our primary testing and optimization period for advertising. The lower costs make it ideal for experimentation that informs the rest of the year.
New Year Product Launches
Q1 is an excellent time to launch new products on Amazon:
- Lower competition: Fewer sellers launching new products means less noise
- Cheaper advertising: Lower CPCs make new product launches more affordable
- New Year motivation: Products aligned with New Year resolutions (fitness, health, organization) have built-in demand
- Spring pipeline: Launch spring and summer products now to build ranking before peak demand
The key to Q1 launches is aligning your product timing with seasonal demand patterns. Products launched in January have months to build review profiles and organic ranking before the competitive summer and Q4 periods.
Converting Holiday Buyers to Subscribers
The customers you acquired during Q4 are your most valuable Q1 asset. Convert them to repeat buyers:
- Subscribe and Save: Enroll eligible products and offer attractive initial discounts (15-20%) to drive subscriptions
- Retargeting: Use Sponsored Display and DSP to reach holiday buyers with replenishment messaging
- Product inserts: Include QR codes or calls to action in packaging (within Amazon's policies) to drive engagement
- Brand Store updates: Refresh your Amazon Brand Store with New Year messaging and cross-sell opportunities
A customer acquired during the holidays who becomes a Subscribe and Save subscriber has 5-10x the lifetime value of a one-time purchaser. The Marknology team prioritizes subscriber acquisition as a core growth metric for our managed brands.
Spring Planning and Preparation
Use the January-March window to prepare for the rest of the year:
- Q4 post-mortem: Deep analysis of what worked and what did not during the holidays
- Annual strategy development: Set goals, budgets, and timelines for 2026
- Listing refresh: Update all listings with fresh content, new images, and optimized copy
- International expansion planning: Q1 is ideal for preparing to launch in new Amazon marketplaces
- Spring inventory ordering: Place orders for spring and summer products early to avoid supply chain delays
Andrew Morgans and the Marknology team often discuss strategic planning on Startup Hustle, and our Media Hub features content on building year-round Amazon strategies. For brands considering international market entry, Q1 is the ideal planning window.
Frequently Asked Questions
Does Amazon sales drop significantly after the holidays?
Yes, most categories see a 30-50% sales decline in January compared to December. However, certain categories like fitness, organization, and self-improvement see January spikes.
Should I reduce advertising spend in January?
Reduce but do not eliminate. CPCs drop 20-40% in January, making it an efficient time to maintain visibility and market share while competitors pull back.
How do I handle excess holiday inventory?
Use Amazon Outlet, create coupons, run Lightning Deals, or consider removal orders for aged inventory. Avoid long-term storage fees by acting before February.
When should I start planning for Q2?
Begin Q2 planning in February. This gives you time to analyze Q4 data, identify trends, and prepare inventory and advertising for spring and early summer.
How do I retain customers acquired during the holidays?
Use Subscribe and Save, follow-up email campaigns through Amazon's buyer-seller messaging, and retargeting through Sponsored Display and DSP.
What categories perform well in Q1?
Fitness and wellness, organization and storage, tax and finance software, educational products, and winter sporting goods all see strong Q1 demand.
Best, Drew