If there’s anything that requires your constant attention in ecommerce, it’s inventory management. But no matter how closely you watch your inventory, from time to time, there will be slow-moving products and excess inventory that you need to get rid of. Especially at this time of the year, when there’s likely some leftover holiday products. This is just the nature of retail. How you choose to handle it though, can make the difference between products gathering dust on shelves and a healthy bottom line.
The key is to let go of products that aren’t selling. You have capital tied up in every product, so you need to figure out how to turn excess inventory into cash. Holding onto stale or excess inventory is costing you money, and cash flow is the lifeblood of your business.
There are three killer strategies to get some value out of your excess inventory: sell it, remarket it, or bundle it.
Run Special Sales
Nine times out of ten, your best option is to sell your old and excess inventory. But if the products were that easy to sell, you wouldn’t be reading this article. So, it’s time to talk strategy. Consider selling your products at deep discounts, 35-70%. Yes, it’ll likely eat into your margin, but you need to move these products off your shelves. There are many sale options you can run to convert your excess inventory. Here are four to consider:
1. Clearance Sale
Host a couple of clearance sales a year. Offer discounts on inventory that hasn’t sold for the previous 3 to 6 months. Send emails and use social media to promote your sale. You can also create a clearance section on your website that offers discounts on stale inventory as a permanent feature.
2. Flash Sale
There’s a psychological factor at play when a sense of urgency is created. Businesses utilize this little nudge to help customers into a purchase decision. Having a limited-time offer on products is an incentive for shoppers, and a flash sale does just that.
3. Specific-Items Sale
Sometimes you have to narrow the focus of a sale. Creating a sale that’s aimed at a specific product, type of shopper, or need may yield the results you’re looking for. Personalizing emails is the best way to inform and persuade customers to participate.
4. Seasonal Sales
Not only can you use the changing seasons to sell excess inventory, but holidays peppered throughout the year make great excuses for a clearance sale. It’s a good time to market to those customers looking for great deals all year round. Using pop-up promotions to upsell or cross-sell is one way you can move excess stock even faster.
Change Your Marketing Strategy
The next strategy is remarketing. Your slow-moving products may not be selling because of how they’re marketed. A little bit of freshening up may be all you need to get them moving off the shelves. Here are some quick and easy changes you can make:
1. New Site Design
What your website looks like can have a big impact on how viewers engage with your store. The appearance of your site directly affects what your viewers think about your brand. First impressions can either encourage them to remain on your site or leave in search of a competitor. Check out some of the latest web design trends and update your site to make it more appealing.
2. New Category
Another possibility you’re not selling stagnant products is because of where they’re located on your site. They could be in the wrong category or hard to find. Try shaking it up a bit by moving products into new categories or adding a new landing page to increase visibility and accessibility.
3. New SEO Strategy
Sometimes items don’t sell because your SEO isn’t effective. Don’t ignore your product pages when you’re working on SEO. Make sure they include relevant keywords and evoke a desire to buy. Do some keyword research to see what shoppers are searching Google for.
Bundling products can be a win-win for your business. You increase your average order value and sell excess inventory at the same time. There are several effective ways to bundle products:
1. Bundle Multiple Units of the Same Product
This strategy works well for small products. Bundle the same type of products but in different colors, sizes, or designs in packages and see if they sell faster. You may also want to try creating 2-packs, 3-packs, or 6-packs of the same items, giving customers a break on the price if they buy more.
2. Bundle Complementary Products
If the products you have in your excess inventory pair well with other products you sell, try bundling them together. A good example of this is including socks with a purchase of shoes. Here are a few ways to market your kits to drive more purchases.
3. Bundle Slow-Moving Products with Fast-Moving Products
Pair products from your excess inventory with your best-sellers. Customers who are interested in the faster-moving product will likely view the bundle as a good deal because they get something extra.
When Nothing Else Works
Sometimes even the best strategies fail, yet you still need to clear out excess inventory. Here are a couple of options for when nothing else works:
1. Donate Your Excess Inventory
When you just can’t sell old inventory, then donating it may be the only solution. Find an appropriate organization that’ll be happy to accept your donation and provide you with a receipt so you can use it as a tax deduction. If you store inventory with FBA, Amazon will donate your excess inventory AND returned products to charities for you!
2. Strike Deals with Suppliers
Contact your suppliers and see if they have any provisions for returns or exchanges. This may be a shot in the dark, but desperate times call for desperate measures. If you have good relationships with your suppliers, they may be willing to help you out.
Inventory Liquidation Wrap Up
Finding ways to deal with excess inventory and turning it into cash takes some creativity. But with the above strategies and effective inventory management, you can free up shelf space and earn some revenue at the same time.
Editor’s Note: This blog post was originally published March 2017 and was updated in February 2021 to reflect more accurate and relevant information.