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How to liquidate excess inventory on amazon

Updated: Feb 18




As an Amazon seller, dealing with excess inventory is inevitable. While it's common practice to clear out surplus stock in retail, the process can be complex and time-consuming.


Whether you operate as an FBM or FBA seller, having excess stock sitting in your Amazon inventory can hinder cash flow, deplete resources, and stifle bottom-line growth. It not only obstructs business investments but also eats into overall profits, with storage costs escalating the longer surplus items remain unsold.


Liquidating excess inventory on Amazon demands considerable effort and creativity, as there's no one-size-fits-all solution for sellers.


If you find yourself needing to clear out excess stock or have slow-moving items that need to go, it's crucial to explore the various options available for liquidating your inventory.

In this article, I'll address all your queries regarding excess inventory liquidation on Amazon.


What are the ways to liquidate your amazon inventory?


- Sell to a third party liquidator

- Place an amazon liquidation order


How do you liquidate your amazon inventory?

By filling in the stock sale form at pinkliquidation.com , the team will be back with you shortly to discuss your stock and price.


What are the benefits of selling to a third party liquidator over amazon’s liquidation process?

There are a multitude of reasons as to why somebody would choose a third party liquidator over amazon. The main ones are:


1. Third party liquidators are transparent with pricing, whereas amazon hide the price they’re willing to pay you

2. Third party liquidators often charge no fees

3. Third party liquidators will work with you to find the best solution for you



Why should you liquidate your amazon inventory?

Selling off your inventory can bring numerous advantages, but the timing of when to sell is crucial. Is there an optimal time to offload excess stocks? Ideally, it's best to choose a time that suits your circumstances. Use our free amazon lliquidation program fee calculator to work out how much Amazon will pay you.


Let's examine the two primary factors that often necessitate the liquidation of excess inventory.



Drop in demand

Excess inventory happens for many reasons, like problems with the product, not researching products well, guessing wrong about how much people want something, or other mistakes in managing inventory.


The fact is, most items don't keep selling forever. Sooner or later, about half of your inventory won't sell anymore. Either way, dead inventory can really drain your resources. The longer you keep those items around, the more money you lose. In situations like this, it's important to use clearance strategies as soon as you can.


Storage fees

If your products sit unsold in an Amazon warehouse for too long, it's time to consider selling them off. While FBA is great for rapid sales growth, if your profits start to decline, storing your products with Amazon can eat into your investments and cause cash flow problems over time.


Keep in mind, Amazon's storage is ideal for fast-selling items. But if your products aren't moving quickly, you'll face hefty additional storage fees.


If this happens, it's best to retrieve your inventory to avoid excessive storage costs.


Change in branding

Many companies decide to change their branding. This can leave excess stock with the old company branding on it. Rather than reduce the price of this product on amazon, and affect the brand's reputation. Many companies decide to simply liquidate these products to avoid messing up their amazon listing.


Amazon account issues

A lot of people face account issues such as: being kicked off listings, outpriced, products are no longer profitable, the list goes on.


These reasons can lead amazon sellers to being stuck with the stock, therefore needing to liquidate it. At the end of the day, something is better than nothing.



How do you avoid liquidating excess inventory?

You've got some extra Amazon inventory, and it's not ideal to let it sit and gather dust in the warehouse. But does that mean you have to rush to clear it out right away? Not necessarily! Liquidating will incur high fees, so there are some other methods to try first

Liquidating your stock should be a last resort, after you've tried other ways to sell your slow-moving products. Consider these points, for instance:


Seasonal products

Is your product not selling because of what it is, or is it just bad timing? For example, if it's a seasonal item like winter clothes or Christmas decorations, and the season has passed, sales might drop. Then you have to decide whether to keep the inventory until next season or sell it elsewhere.


SEO optimisation

Are your listings optimised for SEO? Without the right keywords, your products may not appear when customers search for them. It's crucial to select the most profitable keywords and utilize Amazon's parent-child ASIN feature to enhance your revenue margins.


Amazon selling account

Is your Amazon selling account in optimal condition? Insufficient social proof, such as a lack of positive reviews, can lead to a decrease in sales due to diminished customer trust. It's imperative to take measures to rectify any issues with your Amazon business and enhance your social proof to bolster your sales performance.


Pricing

Is your product pricing aligned with market expectations? If your prices are not competitive and fail to meet industry standards, customers may opt for competitor products over yours.



What are the benefits of liquidating inventory?


Eliminating storage fees charged by Amazon: 

Liquidating excess inventory as an FBA seller helps in avoiding unnecessary and costly storage charges imposed by Amazon.


Increases your Amazon seller rating

As you no longer have the deadstock holding your account back, your account metrics will be overall better and Amazon will reward sellers for better metrics


Frees up capital

A major benefit of liquidating excess stock is that you will get money back for the stock that you could not sell! This money can be reinvested into more profitable product lines.


Relieving stress and panic: 

Liquidating inventory alleviates the burden of having stagnant stock that incurs additional costs without generating sales, easing anxiety associated with unproductive inventory.


Optimal use of warehouse space: 

Liquidating excess inventory frees up valuable warehouse space, allowing for the allocation of newer and more popular products, thus preventing resource wastage.



What is amazon FBA liquidation?

The FBA Liquidations program, developed by Amazon, is designed to assist FBA sellers in recovering value from customer-returned products and excess inventory. This initiative has proven highly beneficial for sellers, as it eliminates the need to pay storage fees for obsolete inventory items stored in Amazon warehouses.


The FBA Liquidations program offers a profitable method for removing unsold items from your Amazon warehouse.


How does the FBA liquidation program work?

Rather than incurring fees to remove or dispose of excess FBA inventory, sellers have the option to liquidate surplus inventory through a wholesale liquidation company facilitated by Amazon, or they can choose to go through a third party liquidator. Through this process, Amazon arranges a buyer for excess inventory slated for liquidation.


Participating sellers in this program who liquidate excess inventory can recoup a portion of their inventory cost. The net recovery value is typically reflected in the seller's central account within 60-90 days following the liquidation order placement.


The net recovery value of items slated for liquidation is determined based on various factors, including overall sales history, sales history of the liquidating ASIN, and the average FBA selling price on Amazon.


Wholesale liquidators purchase the inventory at a gross value based on reduced rates typically ranging from 5% to 10% of the average selling price.

Subsequently, Amazon deducts its fees and disburses the net recovery value to the seller.


How to create an Amazon FBA Liquidation Order


1. Log in to seller central


2. Go to "Inventory Planning" page


3. Enter your products ASIN number into the search box

Click “Action” next to the items then “Create Removal Order”


4. On the “Recommended Removal” report, click “Begin Removal Process” and select “Liquidations".


5. Specify the quantity of units to liquidate and click “Review.”


6. Click “Confirm Order” if everything is correct.



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