The Best Ways to Liquidate Your Amazon Inventory

All sellers have made the difficult decision of choosing whether to sell their inventory at a loss, give it away, or destroy it altogether. While this is an unpleasant part of the business process, it’s almost inevitable.

If you’re thinking of doing the same thing, there are many factors that you should consider first before choosing which option is best for you.

Keep reading to get some helpful tips on the best ways to liquidate your Amazon Inventory.

Why Liquidate Your Amazon Inventory in the First Place?

There are many reasons why liquidation is the best option when it comes to your Amazon inventory, especially when it’s in an Amazon warehouse. It all boils down to not racking in too much storage cost that it slowly eats through your capital.

Your Product Doesn’t Sell Anymore

This is likely if you’ve capitalized on fad items. These products may sell like hotcakes one day and be old news the next. Or it’s also possible that the inventory is out-of-season.

You’re Moving Into a New Niche

Maybe you’ve discovered a new niche you want to transition into and can’t wait to get rid of your other products to concentrate on this new venture.

You Have Stranded Inventory

There are many reasons why your inventory can be stranded, and it usually hurts your Inventory Performance Index (IPI), which could in turn affect your other listings.

It’s Good for Your Mental Health

There’s so much anxiety that goes into having a slow-moving inventory in a storage unit you’re paying for. The longer you wait to remove them, the more it stresses you out.

Things to Do Before Deciding to Liquidate Inventory

While liquidating dead inventory is almost always the best choice, there are some factors that you need to consider first before making a removal order. And because inventory liquidation should be a last resort, make sure that you’ve done everything to revive the listing first before metaphorically hitting delete.

Check Your Listing

Sometimes, the reason why your products are not selling is that they don’t have an active offer on Amazon. We call this stranded inventory, and there are many ways to fix it.

Make sure that you also optimize your listing, e.g., use high-quality photos, write engaging content, etc.

You should also make sure that the listing is in the correct category. Maybe the reason why buyers have not been adding to cart is because they were looking for something else that had nothing to do with your product, but for some reason, it showed up in the search results.

We’ve seen a rainbow-colored jump rope show up as a paid ad when we were looking for kinetic ropes, so make sure you don’t make the same mistake.

Reconsider Your Price

Unless you’re selling a luxury item, your prices should be competitive. In this area, the race is always to the bottom. Compare your price to that of your competitors and adjust accordingly.

Improve product awareness. Perhaps your listing just needs a little boost, so it might be good to spend a little more on PPC ads. However, in the long run, you would want to drive external traffic to your Amazon listing by creating great content.

Getting your product in front of the right people at the right time is basic in marketing. And unless you’ve already done your best to do that, don’t be too hasty in jumping into the liquidation process.

Realize This Is Normal

If you’re a new Amazon seller, don’t be disheartened by having to liquidate inventory even if it’s at a loss. This is normal in any business, and even big companies need to do this from time to time.

The Best Ways to Liquidate Your Inventory

When you’ve done all you can to bring the sales up but nothing seems to be working, then it’s time to pull the trigger on liquidation. Here are the best ways you can liquidate your Amazon inventory.

Lower the Price

People have a tendency to buy more if they see that the price has been slashed. It gives them the feeling of getting more value for their money if they see that red Sale sign on your items.

You can also opt for a buy-one-get-one deal to move your inventory faster, or better yet, bundle products together.

This technique is great for three reasons. First, it allows you to liquidate your inventory faster because you’re selling more. Second, it gets your bundled products into the hands of more consumers who can then experience for themselves how great your products are. Third, you’re getting a bit of your capital back compared to just destroying inventory outright.

Give Them as Freebies

Instead of destroying your dead inventory, use them to incentivize buyers. Everybody loves free stuff, and your customers will thank you for providing them with more than what they paid for.

Sell on Other Platforms

Amazon may be your first choice, but it certainly isn’t the only ecommerce platform out there. There are many other marketplaces and sales channels outside Amazon where you can sell your products.

To do this, you will have to create a removal order and pay for additional fees to transfer your inventory. But at least you will get another shot at getting your money back.

Give Them to Reviewers

Reviews are important when it comes to ranking your listing on Amazon. If there’s still hope in reviving your inventory in the future, you can give the products to reviewers.

Of course, I’m not saying you should resort to black hat tactics because there are legal ways to get reviews. The reviews I’m talking about will not be posted on Amazon itself but on personal blogs or Youtube channels, which can potentially increase your organic traffic in the future.

Another thing you can do is to enroll your product on Amazon Vine. This will help you get reviews by basically giving your products away, but it’s within Amazon terms and conditions.

Use Amazon Outlet

This was created to give sellers an avenue to liquidate their inventory faster without leaving the Amazon platform. The good news is that there are no additional fees for this. However, there are requirements for eligibility you need to comply with.

Donate to Charity

If you know of people who can benefit from your inventory, consider giving them away. You might have to shoulder the shipping costs, but the altruistic feeling you get after will definitely be sweeter than just having your products destroyed. You may even gain tax advantages when you choose this option.

A Note About Using Inventory Liquidators

If this isn’t the first blog you’ve read about liquidating inventory, then you might have come across others who recommend using inventory liquidators.

These are companies that specialize in liquidating sellers’ products, and in general, we don’t recommend using them.

They tend to give you only 5 to 10 percent of the cost of goods sold, and after paying for removal costs, you may end up paying more compared to just having your inventory destroyed by Amazon.

Things You Can Do to Minimize Inventory Liquidation

While inventory liquidation is a normal part of running a business, it is neither a desirable nor a pleasant process. Fortunately, there are things you can do to minimize the number of times of having to make this decision in the future.

Research Your Niche Well

Don’t go for items that go out of trend quickly. Picking a niche for your ecommerce business is one of the most crucial steps to make sure that your business thrives.

Don’t Overstock

This is basic in inventory management, but I need to mention it here. Many sellers make the mistake of stocking up without considering how much inventory to purchase.

Consider also the seasonality of the products, as well as the lead time to make sure that they are neither too late nor too early for buyers.

Conclusion

Inventory liquidation is a reality every business owner must accept. Hence, Amazon sellers should know how to do it right.

Before making the decision to liquidate your inventory, make sure you’ve already taken the necessary steps to minimize losses.

If you’ve made some costly mistakes before regarding inventory management, share it with us in the comments section below. It would be helpful for other sellers not to make the same mistakes.

Still feel like you need some help dealing with your inventory? We can help you find an experienced inventory management specialist.