How to liquidate inventory

How to Liquidate Inventory Stuck in Amazon FBA

Liquidating items stuck in Amazon FBA is important. Here are some smart tactics to remove or liquidate slow-moving items before they cost you too much.

Amazon’s FBA program presents a great opportunity for any seller looking to grow his or her business on Amazon. When you participate in the Amazon FBA program your products become eligible for all of the Prime benefits that Amazon offers its Prime subscribers. To participate in the Amazon FBA program, you are required to send your products to Amazon fulfillment centers so Amazon can fulfill your products for you.

While many products sell very well through the Amazon FBA program, other items may not sell. If left unsold these items will sit in the fulfillment centers and cost you monthly storage fees. Even worse, if you get hit with long-term storage fees then you’ll end up paying a very hefty price for not liquidating your products while you had the chance. Therefore, it’s important to keep an eye on your FBA inventory and either remove or liquidate slow-moving items before they cost you too much.

Before you liquidate, however, make sure you know the difference between Dead Inventory versus Long-Tail Inventory.

  • Dead Inventory – Inventory that is sitting for too long and doesn’t move no matter what. (it’s just dead) vs.
  • Long-Tail Inventory – Products that take a long time to sell but are still be worth it because they are very profitable.

Some Common Housekeeping Tasks to Optimize Your Inventory

It is a good habit to analyze your key performance indicators on a regular basis. Making sure you define and monitor key business metrics helps you focus on what is working and what needs improvement. One of the most important metrics to keep in mind is to know how stale your inventory is and to have a plan when inventory becomes stale. Here are some common things to consider so you can improve your products’ chances of selling so you don’t take such a big hit on liquidating your inventory. Some good ideas are:

  • Make sure the item you are considering liquidating is optimized with several high-quality images, a good title, description, bullet points and keywords. Sometimes all that is required to get a product moving is to optimize the listing.
  • Is your item in the right category on Amazon? Look at its ItemType to see if it is in the right place. Use the product classifier tool in Amazon to see if a better ItemType is warranted: https://sellercentral.amazon.com/listing/classify?
  • Use tools like CamelCamelCamel.com to analyze your product or products similar to yours to see if it has a chance of selling if you tweaked it. You might be able to uncover a lot of things you missed about your product.
  • If you want to liquidate your product, make sure you’re the lowest price on Amazon. There are probably a lot of products just like yours so if you’re not the lowest priced product then your chances of liquidating are low.
  • Do you have a repricer set for your items? If not, you should. If you have a repricer, make sure to remove any business rules that will prevent your item from going to liquidation levels.
  • Make sure it is a good time to sell your items. For example, people aren’t buying expensive electronics during the summer because they are in vacation mode. Seasonality is a very important factor in retail. If you try to liquidate your item at the wrong time then you may lose out. Sometimes it is better to wait for a better season to move your item.
  • Look at your Account Health statistics to see if you are performing well on key performance metrics. If you aren’t performing well you lose the buy box and your items lose placement in search results. If you are not performing well, it is difficult to get good results on Amazon. You need to make sure you are performing well on key metrics such as late shipment rates, etc.

Effective Tactics to Move Inventory on Amazon

Here are some good strategic tactics to use to improve your sales in general. These tactics don’t necessarily have to be applied to items you want to liquidate. Some effective tactics include:

  • Getting Product Reviews to Revive Sales – Reviews are a great way to jumpstart sales because reviews allow for better search results for your products. You can use tools such as feedback genius by SellerLabs to email your buyers to ask for reviews.
  • Temporary Price Reduction – You can temporarily lower the price to an insanely low price and make sure feedback genius is emailing every sale to ask for reviews. This increase in traffic, sales and reviews will jumpstart the sales rank and get the product’s momentum going again.
  • Bundle Your Products – Can you bundle your item with something else to jumpstart demand?
  • Consider Buying PPC Ads – Here are some common advertising platforms on Amazon that you can use to improve product awareness.
    • Sponsored Products Campaigns – Increase Product Visibility with Sponsored Products.
    • Headline Search Ads – Build brand awareness with Headline Search Ads.
  • Consider running an Amazon promotion
    • Free Shipping Offer – Offer a free shipping promotion if the item is not already free shipping.
    • Percentage Off – Use Advanced options to set up a promotion with a tiered discount structure to encourage the customer to buy more because they get a better discount.
    • Buy One Get One – Set up a limited-time, “buy one (or many) get one free” offer to spotlight a new product or to get your current customers to buy differently.
    • Giveaway – Offer your items for free as part of sweepstakes to generate buzz around products and increase social media following.
  • Consider running an outside-of-Amazon Promotion – Snagshout.com is a popular Amazon deals site to run promotions on your products. It has more than 150,000 shoppers, and every transaction happens on Amazon. You just need to create one-time use promo codes through Amazon then upload them into your Snagshout campaign. Select a quantity and discount price, then choose a daily limit. For liquidation purposes, set your daily limit equal to the quantity you’re trying to liquidate. One side benefit to using Snagshout is that Snagshout shoppers must leave an honest review to purchase more products on the site. Therefore, your item will get more reviews so it will help jumpstart sales even more.
  • Discount Single Unit Purchases or Offer a Flash Sale – Offer a limited-time Sale Price. This is done by editing your listing.
  • Facebook or Google Advertising – Consider doing Facebook or Google Adwords advertising and driving the traffic to Amazon.
  • Consider Selling on Alternative Channels – You can sell it as a lot in eBay or Craigslist or on a liquidation website (like liquidation.com) and have it fulfilled by Amazon FBA when it sells. You can also offer your product to sites like Woot.com or Groupon Goods.
  • Try the Amazon Liquidation Program – Amazon normally give you 2.5% to 10% of the original item selling price. Register by the 1st of the month and you’ll find out if they are accepted by the 4th of the month. Once the inventory is accepted they are locked in. During the 60 days that your item is in the liquidation program, Amazon will not charge you any Long-Term Storage Fees, which is a huge benefit. However, if an item is accepted in the liquidation program you can’t change your mind. If an item sells in liquidation amazon keeps 10% of the proceeds. The link to learn more about the program is: https://sellercentral.amazon.com/gp/help/201507440

Last Ditch Options to Liquidate Inventory

  • Destroy Inventory – You can choose to destroy the inventory. This is an option that Amazon gives you as part of your removal options.
  • Do a Removal Order – Have your items removed from Amazon’s fulfillment centers so you can possibly sell them through these alternative methods.
    • Remove and restock the item after long-term storage fee “blackout period” of 4.5 months.
    • Do a removal order and sell it in a garage sale.
    • Remove the item and consider doing trade-ins with Gazelle.com or Amazon’s trade in program.

Conclusion

Nobody like to liquidate or reduce the price of their inventory. However, if an item doesn’t sell, it does no good to incur continued storage fees (or even long-term storage fees). It is often better to take a hit on that inventory and use the proceeds from the liquidation to invest in better selling products.

While there are a million ways to move inventory, the tactics listed in this article cover many of the most common ways to sell slow-moving products. If you are getting close to Amazon’s long-term storage fee dates, then it becomes even more important to us a combination of these tactics to decrease your exposure to dead inventory.

Just like many of the other tasks involved in running a business, managing slow-moving inventory must be a key activity to perform on a regular basis. If done consistently, you’ll enjoy improved business metrics and a healthier bottom line.

Business Consulting Services: If you’re a small business owner looking to start or improve an online business then let me show you how to benefit from my experience. I have helped several online resellers grow their businesses by developing an online strategy to sell on Amazon, eBay or any other marketplace. Call me at 310-574-2541 or email me at Pez@Pezlogic.com for a complimentary business review.

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