How to Liquidate Amazon Inventory and Avoid Facing It Again

Today I’m going to run you through how to liquidate Amazon inventory.

Nobody wants to have to admit defeat and get rid of their inventory, but these things happen.

Whether you’re overstocked, have a slow-seller, or you want to move onto new products, you’ll need to know how to liquidate Amazon inventory you can no longer use.

Before we jump into the options, let’s look at the main reasons sellers have to do this.

Knowing When It’s Time to Liquidate Your Inventory

While there are several reasons why Amazon sellers choose to get rid of their inventory, these are the two main reasons sellers do it.

A Product Just Isn’t Selling

A product that won’t sell is no use to you as an online entrepreneur – I’ve had my fair share of non-sellers.

This doesn’t even need to happen gradually, either.

Insufficient research and marketing tactics can both kill your sales right from the start.

In other instances, products that were once popular can gradually start to lose rankings and fall away.

The reality is the vast majority of products have a limited lifespan.

So, eventually, sellers do need to get rid of finished products to avoid draining their resources.

You may want to hold onto the stock to see if things change, but this only makes the financial loss even more significant.

This is the first reason to liquidate your inventory.

If you want to double-check your sales numbers and store stats, here’s some information on Amazon Brand Analytics and Sales Rank Charts.

A Product is Costing Too Much

When a product is popular, sales are high, and it helps justify the associated costs, including Amazon’s warehousing fees.

When sales slow down, however, the associated costs can rack up pretty quickly.

Amazon charges additional fees for items that move slowly or not at all.

If this is happening to you, it’s time to liquidate your inventory.

How to Liquidate Amazon Inventory at the Right Time

There isn’t a right time to liquidate your inventory. This is a decision you need to make based on your sales numbers and research. You need to shift your dead stock at a point that feels right for you.

If you’ve gone down the FBA route, moving the excess stock as soon as possible eliminates unnecessary storage fees. What’s more, knowing you’re cutting costs will get rid of any extra pressure you’re feeling to make more sales.

Once you get rid of non-sellers, you can immediately shift your focus to the products that are making money.

If you want to find better products the next time around, use the strategy I talk about in the video below.

Amazon Inventory Liquidation Options

Next, let’s look at your liquidation options.

Drive More Traffic to Your Listing

This is more of a last resort than jumping straight into the liquidation process. If you want to give it one last shot, I suggest increasing your PPC budget.

Before you do this, look at your product offering compared to the competition, would you choose your product over theirs?

If not, you’ll be wasting your money.

If keyword-based PPC campaigns aren’t working for you, give Headline Search Ads or Sponsored Products a try.

You should only really consider this option if you want one last shot at resurrecting the listing.

Decrease Your Product Prices

Discounting your products is one of the most straightforward ways to clean out inventory.

There are two ways you can go about this. You can gradually decrease your prices to lose as little money as possible, or you can slash your price to a break-even point.

When we’ve liquidated Amazon stock in the past, we’ve worked out our break-even point and sold through the stock; this beats paying Amazons removal charges.

Approach Competitors

Depending on product features and branding, you may be able to sell your stock to a competitor. Naturally, this tactic works better when the products are unmarked and as basic as possible.

If you decide on this tactic, make sure your negotiation skills are in top form. Keep your prices as close to cost as possible to make as much of a profit as possible. Don’t forget to keep removal order fees in mind.

If this seems like a time-consuming task to you, you may want to consider hiring an Amazon virtual assistant.

Run a Giveaway or Promotion

Giveaways and promotions are always enticing and can help you move some of your stock without too much effort.

Buy-one-get-one-free is an excellent route to consider; you can set up these promotions within Amazon and use your marketing images to tell people about it.

If you’ve got one related product that sells well, you could use the power of that listing to boost the one that isn’t performing well.

The positive knock-on effect of this tactic is that you also boost brand awareness, which can increase sales of new products.

Contact a Liquidator

If you’d prefer to get rid of stock with as little fuss as possible, consider selling it to a liquidator.

Liquidators are part of an eCommerce network, making it easier for them to find buyers for your stock.

Unfortunately, Amazon no longer offers liquidation services, so you would need to work with a third-party.

If you don’t know of any liquidators, take some time to research your options and be ready to do some negotiating.

Unless you agree on a price, there’s no reason to settle on a particular liquidator.

I feel this is one of the better ways to make back some of what you invested in the inventory.

Consider Other Platforms

I’m an advocate for Amazon, but when you need to get rid of inventory, sometimes you need to consider other platforms.

eBay and Shopify are two platforms I would recommend for liquidating inventory in the most cost-effective way possible.

If your stock is sitting within Amazon’s FBA network, this is still easy to do.

With Shopify, you can integrate with Amazon FBA; this article explains the process step by step.

Amazon and Shopify go together very well, here is a video explaining out you can get the most out of the two platforms.

Amazon Disposal Request

Lastly, if you want to move on, you can head straight to the dumpster.

Many sellers that operate outside of the US and UK tend to go down this route.

Amazon will need you to complete a disposal request and pay a disposal fee.

Fortunately, disposal fees are lower than removal fees.

You can submit your disposal request via Seller Central by clicking on the Inventory Management Options menu item.

Destroying any excess inventory is also an excellent way to protect your brand’s reputation if you still plan to keep selling online.

Avoiding Amazon Inventory Liquidation

The aim of the game is to avoid having to liquidate your Amazon inventory in the first place.

To do this, you’ll need to ensure that your product research and sourcing is as good as it can be.

Here are some key considerations to keep in mind to avoid inventory liquidation:

  • Improve your product offering Amazon is incredibly competitive; if you want to succeed in the long term, you’ll need a better product offering than your competition. In our training, we teach students how to use Amazon data to create a vastly superior offering.
  • Low competition markets As we all know, Amazon reviews are king. Don’t try to enter markets that are saturated with established sellers with 1000’s of five-star reviews, put yourself in the customer’s shoes, are you giving them a good reason to purchase yours over everyone else’s?
  • Avoiding high-risk markets is incredibly important. The following types of products are considered high risk in my opinion; fragile, seasonal, electronics or hazmat.

I like to focus on low competition evergreen products, by evergreen I mean products that sell consistently all year round.

Final Thoughts

Inventory liquidation happens to most Amazon sellers at some point, it isn’t the end of the world, but you need to do what you can to learn from your mistakes.

I also highly recommend having the right tools to assist you with product research; they can save you a lot of time and money in the long term.

Once you understand product life cycles and know how to identify the right products to sell, you can spend a lot less time worrying about dead stock.

If you have any questions about getting rid of inventory, leave me a comment below.

Until next time…

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