14 Ways to Liquidate Amazon Inventory
Liquidation strikes fear into the hearts of many business owners.
It conjures up memories of large signs outside businesses exclaiming a liquidation sale or commercials promising rock bottom prices when a store is going out of business.
Seeing a business go through liquidation may bring up images of a sinking ship instead of anything remotely positive.
But in the world of ecommerce businesses, liquidation is much more commonplace. For Amazon FBA businesses in particular, liquidating inventory is sometimes a natural part of inventory management.
Let’s explore why Amazon sellers face the constant question of how to liquidate inventory and the challenges and advantages that arise from it. We’ll also dig into how FBA sellers miss out on the chance to save their bottom line with a liquidation solution no one talks about.
Why Would You Liquidate Your Amazon Inventory?
In the simplest of terms, most FBA sellers have to liquidate inventory because they “overdid it.”
They may have forecasted way more demand for their products and ended up with excess inventory or gotten nervous about increased holiday demand and ended up with excess stock as a result.
Inventory management isn’t easy, and it’s sometimes a mix between an art and a science. Most FBA sellers will admit that the greatest challenge to their business is getting their inventory just right.
Another reason sellers may be forced to liquidate their inventory is because a product ended up being a dud. While the seller might have done their best to follow trends and find a sweet spot for competition, the product might not have taken off, the lack of sales leaving them with a product no one wants.
In a similar vein, a slow-selling product could be holding your profit back, and the only way to free up capital is to liquidate.
Or, removed from product performance or inventory management altogether, a seller may want to move on to a completely different business venture.
All of these are good reasons to liquidate, though this doesn’t mean liquidation’s the best option.
Many People Liquidate When They Should Sell
Liquidating inventory, especially dead inventory, can make a lot of sense.
Many times, though, you can fix your declining business’s problem instead of selling off your inventory for cheap.
You may not want—or even know how—to fix it, but that doesn’t mean you can’t still sell the business you’ve built.
Many buyers will buy an Amazon FBA business that is declining. If that’s you, you can see if you could sell your business on our marketplace here.
Here Are Just a Few Ways to Liquidate Your Amazon Inventory (Without Losing Your Shirt)
Lower Your Prices or Offer Discounts
There’s nothing like a sale to get things moving for your business.
Depending on how comfortable you are with lowering prices, you could offer a steep discount to get lots of customers to come through and take care of your excess inventory or dud product.
Experiment with Higher PPC Budgets to Drive More Sales
PPC is another pain point for FBA sellers when it comes to drawing consistent traffic to their listings.
Having the right amount of PPC in place could give you the sales boost you need to exit your inventory.
Note that you should also be aiming to gain more product reviews while you’re at it to rank higher on Amazon and establish trust with consumers. Gaining an influx of reviews could help you avoid inventory issues in the future because such reviews can sell products for you.
Use Scarcity Marketing
Scarcity is one of the oldest tricks in the sales and marketing guidebook.
Tell customers that a product will be no more once it sells out, and you’ve given them a good reason to act now instead of waiting. Create scarcity with consumers that there is truly limited inventory left, and their scarcity-induced buying will help you look at excess inventory and say, “Once gone, it is gone forever.”
Throw a Giveaway
Everyone loves free stuff. Giveaways are often used to help launch new products, but they work just as well at getting rid of products.
Giveaways are ideal because you’re not emotionally tied to the product, and you’re happy to hold enticing giveaways to get rid of stock. Your audience loves it because they feel like they’ve walked away with a free gift, which entices them to stick around and keep shopping with you.
Get Influencers to Review the Product
You can save your inventory woes through the power of social media and influencers.
Influencer marketing is one of the fastest-growing marketing strategies. Influencers make their money through sponsored products and leverage their audience to advertise products. You can venture off pure social media and even find bloggers, YouTubers, and podcasters in your niche that you can send the product to.
It’s two birds, one stone. You get rid of product easily via the influencers while giving your brand valuable exposure.
Create a Bundle
Bundling is a savvy way to upsell customers or more product while getting rid of unwanted inventory.
Bundle the dead inventory with something that is selling really well, and your audience will be none the wiser that you’re liquidating your stock.
Leverage Deal Sites to Sell On
If your own customer base didn’t take to a product, that doesn’t mean another site’s customer base would do the same.
Sites with a specific focus on discount offers might love to take over your excess inventory to sell on offer to their audience. You can sell off what you own without losing the value of the inventory entirely.
Iterate on Your Return Policy
A longer or better return policy can sometimes, depending on the product, bring dead inventory back to life.
If the product is both expensive and a lifestyle product, giving customers adequate time to incorporate it into their lives and feel happy with it will allow you to sell it off without fearing that it will be returned.
Sell to Your Competitors
When facing liquidating inventory, turn your competitors into your friends.
Your closest competitor would much rather lose money to you by buying out your product than lose money competing with you.
They’ll be more than happy to see you out of the game, so you could likely negotiate a decent selling price for your product.
Return the Inventory to the Supplier
This option really depends on the supplier relationship.
If you’ve established good rapport with your suppliers over the years, some suppliers may be willing to swap your non-selling product with new product that you might be able to sell.
The supplier wants to keep you as a paying customer; so, to ensure that you keep paying them, they’re hoping they find you a product that will sell.
Utilize a Liquidator or Amazon Liquidation
A liquidator is a special kind of merchant that buys products and then sells across their own network of stores. They may sell to retailers who specialize in discounted name brands and generalized goods.
Their entire business is dependent on giving business owners inventory solutions, so using them when facing liquidation is a solid option.
Or you could also keep your liquidator in-house with Amazon. Seeing that so many FBA sellers were facing the same struggles with needing liquidation solutions for their Amazon FBA inventory, Amazon made a smart move and came up with a liquidation program themselves.
A professional FBA liquidations service will offer all the knowledge and experience to make your liquidation as painless as possible.
Destroy the Inventory
It’s not the favorite option of the list, but it is a viable one.
Do this if you intend to keep the same brand for other products, as this will assure you that nothing will be done with your products down the road that you won’t like (i.e., if you could endanger your good review standing or have a competitor use that inventory to come after the rest of your brand).
Donate the Inventory
Donating your stock could help you get rid of your stock in good conscience.
It’s a nice thing to send your product away if it fits a worthy cause, but not all products can be given away and really tick that box.
Use channels outside of Amazon (Facebook, Google Shopping, or even your own store that leads them to Amazon) before giving up entirely. Selling on eBay or partnering with specialists in retail arbitrage who are hungry for liquidated inventory could help you make your remaining sales.
Liquidating Cuts Down on Long-Term Storage Fees
Long-term fees will fill Amazon’s wallet, not yours.
The longer you keep your inventory at Amazon’s warehouses, the longer you have to pay storage fees. That means you’re spending even more money on top of dead inventory.
FBA liquidations are never pleasant, but freeing up the bandwidth to focus on a more successful product or business venture will get you one step closer to success.
Removing dead inventory can be painful, but it’s better than paying Amazon for something that isn’t selling.
Even if you try all the options on this list and are left with disposal (throwing away product), it will be cheaper than these fees in the long run.
What to Consider Before Liquidating Your Amazon Inventory
Just because your product isn’t selling doesn’t mean it’s not sellable.
Analyze what’s going on; can your product listing be optimized? Can your PPC campaigns be improved?
Look at competitors with solid reviews and Best Sellers Rank (BSR)—what are they doing that you are not doing or can’t do? How could you copy their success?
There are often ways to bring inventory back from the dead, but this takes some creativity and not giving up hope at the first sign of decline.
Even if you do find yourself in a decline, you have options.
Remember, You Can Sell a Declining Amazon FBA Business
There are investors and certain types of online business buyers who will buy an Amazon FBA business that is declining. Your struggle is a challenge they’d love to embrace because they see operational inefficiencies or inventory problems as their chance to swoop in, fix the problems, and raise the profitability of the business.
Selling an FBA business even with slow-selling inventory will often allow you to actually recoup a nice profit rather than lose everything or break even on liquidating your inventory.
Keep in mind that a declining business will have a smaller buyer pool, so you might have a longer period before you’re able to sell what you’ve built. However, in our experience with these situations, it is always worth the wait.
You can see how much your business is worth here.
Or, if you’re ready to get the process started, you can sell your Amazon FBA business here.