If there’s one challenge all brands and retailers face, it’s surplus inventory. While strategies like demand forecasting and velocity repricing can help minimize the impacts of excess, at some stage you’re going to have an overflow to address.
The good news is that there are plenty of profitable ways to approach excess inventory.
Over the years, the e-commerce specialists at ChannelAdvisor have seen sellers come up with some remarkably inventive ways to squeeze as much value as possible out of each and every SKU — even in times when they need to make way for new inventory.
If you’re ready to go beyond the basics of BOGO offers and free gifts, try these tips the next time you’re looking to free up warehouse space.
Step up your paid search strategy
With so many advanced advertising opportunities for reaching consumers on dominant channels like Google, Amazon and Facebook, digital marketing is still a strong option for getting excess inventory in front of purchase-ready consumers. On social media alone, 36% of millennials and 32% of Gen Zers trust paid ads for recommendations when shopping.
That means getting aggressive with your paid search campaigns, particularly after peak seasons, can be a great way to clean up your inventory.
The trick is finding the right keywords based on current trends and traffic. Depending on the time of year, you might choose to bid on terms such as “after holiday sale.” Or you could select keywords related to the latest back-to-school trends. Another tactic is to go after longtail keyphrases specific to products you have deep stock in, since they tend to cost less and convert more.
Explore marketplace expansion opportunities
Sometimes, all you need to keep inventory flowing is a solid expansion strategy. Different consumer needs are met on different marketplaces, and expanding your reach is often the best way to keep inventory moving.
Case in point: eBay. This popular marketplace has changed a lot in recent years, and now offers tons of incentives through its Promotions Manager to help sellers advertise and liquidize goods. It’s also a great place to bundle offers that go well together and offer them for a set price — a particularly effective strategy in the wake of peak seasons when you may be looking for ways to make the most of holiday returns.
Similar opportunities are available across a wide range of global marketplaces, from niche channels like MassGenie and UntilGone to emerging ones such as Target+.
As you identify additional marketplaces that come with built-in audiences likely to be interested in your excess inventory, just be sure you take the necessary steps to keep inventory synced across channels.
Focus on fulfillment processes
Have you ever been surprised at how slowly your inventory is moving? In some scenarios, it’s possible your fulfillment processes could be to blame.
These days, it’s not just the price of a product that gets inventory moving. How you choose to position shipping costs can also have a major influence on someone’s decision to buy from you. Surveys have revealed that 54% of consumers will abandon shopping carts if shipping is deemed too expensive, and 26% will cancel an order if delivery is too slow.
So before you start to move full speed ahead with discounts and deals, you may want to see first if a shift in your fulfillment approach helps get the orders going. Whether you lower your threshold for free deliveries or rely on your data to help guide shipping pricing strategies, shifting the focus to fulfillment may be all you need in some instances to start seeing a pickup in sales.
If the thought of fine-tuning fulfillment sounds too overwhelming, it may be time to consider third-party logistics. Working with a 3PL provider can put important details in the hands of experts who specialize in various aspects of order and inventory management.
Having just the right amount of inventory at all times may sound ideal. But as you can see from the tips above, there are plenty of ways to eliminate surplus stock and keep the orders flowing.
Looking for more ways you can get ready for the year ahead? See which strategies, tools and technologies you’ll need in the white paper: 20/20 E-Commerce Vision for the Year 2020.