How to Accelerate Amazon Sales on Slow-Moving Inventory 

How to Accelerate Amazon Sales on Slow-Moving Inventory 

It can be an Amazon seller's nightmare. You have a warehouse full of inventory you thought would fly off the shelves, but no one's buying. 

You did due diligence and product research on this inventory. Why isn't it moving? Why isn't the demand you anticipated coming to life in reduced supply?

There are multiple factors at play in the Amazon inventory management process, none of which are always predictable. Demand can change for products overnight. And what you once thought would be a no-brainer winner turns into a resource-sucking dud.

Worry not, however. 

You can take some actions to level things out and ensure your Amazon account stays healthy, providing you an opportunity to turn things around with future product offerings.

1. The Amazon Inventory Management Excess Stock Scenario 

What we described above is the dreaded excess stock scenario

This scenario occurs when you have overstock, a surplus, or excessive stock and inventory of a given product in Amazon inventory management. In simplest terms, a product isn't selling and isn't meeting the demand you once projected.

Excess is almost always a result of misguided or poor management of the demand forecasting process. It can also be a result of improper tracking of the life-cycle stages of a product. 

If there isn't a solid product-market fit for your product, it's easy to misjudge demand. Even if there is a product-market fit, that doesn't automatically guarantee that your product will be popular. 

If customers don't have any real interest in your product - especially if that product is disposable or has a short shelf-life - excess stock can quickly become an issue. As you hold onto the excess inventory, it loses value by daily sitting in your warehouses. 

Worse yet, it starts to depreciate. Depreciation makes future product sales less profitable even if demand starts to meet supply down the road.

Sometimes liquidation is your only option. And if it is, it's not the end of the world. It's a standard best practice in the world of Amazon selling that can quickly ride the ship. And provide an opportunity to turn your focus to products with a better fit.

2. How Liquidating Amazon Seller Inventory Helps to Improve Your Account Health

Liquidating Amazon Seller Inventory

Amazon uses several measures to monitor the health of your seller's profile, but one of the most important is the Amazon Inventory Performance Index (IPI). IPI measures the health of your inventory in the Amazon Seller Network.

Your health is equally affected by not having enough units available to meet high demand - leading to lost sales - as holding excess inventory. This excess inventory leads to higher-than-average holding and storage costs affecting your seller profile and rating on Amazon. The Amazon IPI rates your inventory performance on a scale of 0-1000, with 1000 being perfect (and highly unlikely to ever achieve, by the way). The IPI evaluates your inventory's balance based on market demand and scores whether you're on the right track.

If your IPI falls below 350, Amazon starts to limit your ability to send more inventory to warehouses and imposes fines on any excess inventory sitting in Amazon warehouses! Yikes. These scenarios underscore why it's vital to keep a reasonable amount of inventory on hand and liquidate it when necessary. 

3. How to Liquidate Your Excess Inventory on Amazon 

Here are five ways to liquidate your excess inventory on Amazon:

1. Drop prices

2. Increase advertising spend

3. Create a bundled giveaway

4. List excess inventory on deal sites

5. Offload to your competition

Let's take a closer look at each.

Drop Prices on Your Excess Inventory 

Dropping prices on your excess inventory is the most common and easiest way to liquidate. You can either gradually reduce your price daily. Or bite the bullet, and drop prices to a level that's irresistible but still protects your margins.

The most typical way to implement these reductions is either through offering a percentage discount. Or building a packaged deal where customers get an item or two for free if they buy a few.

People like to buy in bulk on Amazon. Packaging your struggling products this way helps them move faster and decrease depreciating inventory sitting in your warehouses.

Increase Advertising Spend 

Increase Advertising Spend

If momentum doesn't build when you drop prices, it's smart to increase your advertising spending. Awareness is the primary goal in Amazon inventory management, so more advertising spend is worth a shot. Make sure to align the increase with a sales promotion. Maybe even with reduced or discounted prices to provide an extra boost.

There's a caveat here. Be careful not to spend too much too fast.

You're already in a cost crunch. 

If dropping prices and increasing advertising spend isn't helping, you can create a bundled giveaway.

Create a Bundled Giveaway 

A creative way to shed excess Amazon inventory is to create a bundled giveaway. Pair a product in your line - or a product that's selling well which you don't currently offer - with your dud product. 

People will buy the popular product anyhow and see your add-on product as a freebie. If you position things correctly, the price point of the bundle can drive a solid return. 

The most important thing to remember is to theme your bundles. Ensure the popular product is complementary to your dud product or at least naturally pairs with it. You don't want to leave potential customers scratching their heads about weird product combinations in a bundle.

List Your Excess Inventory on Deal Sites

The Internet is swimming with "deal sites" to consider when Amazon selling just isn't working. We're all familiar with eBay and Etsy. But there are many others flying under the radar. Wish.com is an excellent option to consider, for example.

Your product-market fit may be better on these platforms. Not every product is a perfect fit for Amazon. Remove some of your stock from Amazon to make it available for the deal sites, and see what happens. You might be pleasantly surprised. This last option may sound crazy, but it can be highly effective.

Offload Excess Stock to Your Competition

Why in the world would you provide your competition with products that aren't selling? It's a reasonable question to ask.

If your competition is in a tight niche market, they'll be looking for an advantage to leverage. Taking on some of your inventory provides that leverage.

This process works best when the product is unmarked and basic. If the product is technical, has many moving parts, or is white-labeled or proprietary, your competition will be less likely to add it to their mix for obvious reasons. Make sure to sell excess stock to the competition as close to cost as possible to minimize losses you'll suffer from redistribution.

Once you've decided it's time to liquidate, you also need to understand how to remove inventory from Amazon and the restrictions placed on that activity.

4. How to Remove Inventory from Amazon

How to Remove Inventory from Amazon

The first thing you have to consider when removing your excess inventory from Amazon is whether you want to close or delete the product listing. There are two separate processes to consider based on this decision.

When you close a listing, you're removing the product from your store, and the product will show as inactive on your pages. The primary identifying information of the product will remain available on Amazon. If you choose to reactivate the product later, it's easy to with a couple of clicks. When you delete a product listing, it's permanent. 

You won't find the product anywhere on Amazon or your seller page. You'll be able to see historical sales data but no other identifying information. You should only delete a product from Amazon if you're 1000% sure you're never, ever going to sell it again in the future. There's a small allowance for buyer's remorse here. If you delete a listing, you have 24 hours to reverse it, but after that, deletion is permanent.

To remove excess inventory from Amazon, you create a Removal Order.  You can choose to have Amazon get rid of your excess inventory - for a nominal fee per item - or have Amazon return the items from the warehouse inventory to an address you provide. This option is the more expensive of the two.

Amazon provides extensive tracking on removal order costs, so you can see the effect each is having on your bottom line. More importantly, so you have a high-level view of the impact of improper product-market fit and poor demand forecasting, to avoid these in the future.

There are a few essential-to-know restrictions on removing inventory from Amazon.

You can choose to have Amazon get rid of your excess inventory - for a nominal fee per item - or have Amazon return the items from the warehouse inventory to an address you provide. This option is the more expensive of the two.

Amazon provides extensive tracking on removal order costs, so you can see the effect each is having on your bottom line. More importantly, so you have a high-level view of the impact of improper product-market fit and poor demand forecasting, to avoid these in the future.

There are a few essential-to-know restrictions on removing inventory from Amazon.

Amazon Removal Order Restrictions

Amazon will ship inventory back to you - the more expensive option - with a few restrictions, including:

1. Amazon will not send the merchandise back to Post Office, Army Post Office, Diplomatic Post Office, or Fleet Post Office boxes.

2. It's possible to ship to non-domestic US addresses, but there's a different process for that.

3. Inventory cannot be shipped by Amazon to another of your fulfillment centers.

You cannot use this inventory to send customer orders, gifts, or promotional items, and

5. Amazon will not ship the merchandise back to you, which is labeled dangerous. They will only dispose of this inventory.

There are also restrictions on the number of items removed and shipping and packaging, outlined on the Amazon website.

5. In Conclusion

Removing excess inventory from your Amazon storefront is sometimes a necessary exercise to protect your bottom line and run a business that's lean and efficient. However, it's also possible to make this scenario rare, rather than a part of standard business practice.

Establishing a concrete product-market fit and making sales projections that are tight and seamless makes removal and liquidation an occasional task to face rather than an annoyance that can kill your store's momentum before it ever has time to build.

DataHawk offers sales estimation and tracking tools to help you verify your product-market fit and only offer products you're confident will be a success.

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