Amazon FBA Inventory Liquidation Options

    Written by Tristan Williams
    on August 05, 2021

    When you’re sitting on excess stock, sometimes the only option is liquidating that Amazon inventory. Knowing how to manage excess or obsolete inventory is key for preserving profit margins, as ​​dead stock can be a huge drain on your resources. Though there are other ways to sell off Amazon inventory, today we’re reviewing the best liquidation solutions…

    Lower Your Price

    It may seem obvious, but heavily discounting your product is a good way to get drive sales and get rid of your excess inventory. There are a variety of strategies you can try… gradually reducing price, matching your competitor’s lowest price, matching the buy box price, manually setting your price, etc. You can use the fee preview report to help you determine how low you can make your prices in order to save money. Check out our post reviewing the various promotions you can use on Amazon. 

    Increase Your Ad Budget

    If you don’t want to lower your prices, you can also consider increasing your PPC spend. Increasing your advertising budget in order to drive more traffic to your listing could be the push you need to get rid of your excess inventory. You can implement keyword-targeted PPC campaigns, Sponsored Products, or Headline Search Ads. This strategy can be especially effective if you simultaneously run a sale/promotion. However, make sure to set a budget and stick to it. Beware of spending additional money on advertising if there are issues with your product or listing. Weigh the risks of going this route because you may experience high costs without the return on investment you are expecting. 

    Utilize Virtual Bundles 

    Combining a less popular product with one of your best-selling products can be a creative and efficient way of getting rid of excess inventory. By bundling your products together, you can increase your overall price and offer value to your customers. Only bundle products that are actually complementary to each other and will appeal to your consumer. Read more on cross-selling here. 

    Use the FBA Liquidations Program

    To deal with excess inventory, Amazon encourages the use of the FBA Liquidations program. The program is designed to help Amazon sellers recover value from obsolete or excess inventory items. By liquidating inventory, sellers recover a portion of their inventory cost (net recovery value) while avoiding the cost of monthly and long-term storage fees. Through the FBA Liquidations program, sellers who participate will have their obsolete/excess inventory liquidated through a wholesale liquidation company. In other words, for a fee Amazon arranges a buyer (liquidator) for the items that sellers have deemed excess and subject to liquidation. The liquidators involved in the program sell Amazon-owned and FBA inventory to downstream consumers, and since Amazon contracts them, these liquidators cannot resell the FBA liquidated products on Amazon. Read our post on distribution leakage to learn more about why it’s so important that these Amazon-approved liquidators can’t resell your products on the platform. Apart from the FBA Liquidations program, sellers can also use Amazon Outlet to recover value from excess inventory.

    Destroy or Donate

    If all other options aren’t worth the effort, it’s time to look towards disposing or donating. 

    Disposing of Excess Inventory

    To have Amazon dispose of your inventory you’ll have to fill out a disposal request. Disposal requests are similar to a removal request, but disposal fees per item are slightly lower than the removal fees. You can submit your request in Seller Central, through the “Inventory Management Options” tab. By choosing to destroy your dead stock, you remain in control of what happens to your product… read our post on distribution leakage to learn more about why keeping control of your inventory is so important. 

    Using FBA Donations

    If you don't want to destroy perfectly good product you can donate it! There are many ways to go about donating, but if you keep inventory in US fulfillment centers you can use the FBA Donation program to do so. The FBA Donations program makes it possible for sellers to automatically donate unwanted inventory to selected US charities. Usual disposal fees apply. Eligible sellers are enrolled in the FBA Donations program by default, and must opt-out in FBA Settings if they don’t want to participate. You can track donated items in your Removal Shipment Detail report.

    Avoid Excess Stock with Good Inventory Management

    Finally, the best way to handle excess stock is to avoid it in the first place. Learn how to forecast Amazon inventory so that you don’t get to the point of having too much (or too little) stock. Check out our post on how to forecast inventory for Amazon.