4 Liquidation Tips for Slow-Moving Merchandise

Apr 06, 2012 10:13 PM  By

Slow-moving merchandise is one of the many nightmares an online retailer has to consider – and a problem that needs to be addressed. Non-moving inventory stresses both retailers’ operations and budgets because it ties up both precious warehouse space and capital that can be used for other products or business expansion.

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A merchant’s best option is often to liquidate the items and move on because at the end of the day, turning a smaller profit on slow-moving inventory is better than losing money while it takes up space and bottom line.

There are a variety of liquidation methods that work depending on the retailer’s overall business goals, operational capacity, and the nature of the liquidated product. Because slow-moving inventory can cause the most problems in a retailer’s warehouse, the order fulfillment process is a key area for implementing liquidation strategies.

Here are four tips that we’ve seen work for online retailers:

Update your ordering options
The best way to reduce inventory often means reducing prices. If that’s not a part of your brand strategy, you can use other methods, such as buy-one-get-one-free offers or discounted per-item pricing for bulk orders. Just be sure to let your warehousing staff know to expect more items per order so that they can pick, pack, and ship new orders more efficiently.

Create new shipping offers
Free shipping has become expected by most consumers, so using it as a tool to encourage purchases is a great idea. Offer free next-day shipping on overstocked orders and advertise it as an exclusive deal. If you choose this technique, don’t forget to let your warehouse provider know so they can prepare to ship expedited orders.

Kit it with another product
If the products are in good shape, offer the surplus as free gifts with purchases, or pair it with another product it can complement if it makes sense (like free mugs with coffee makers, for example). Have your order fulfillment provider pick and pack the liquidated product with each complementary order as a part of a ‘kit’.

Liquidate it online
When products are not moving on your site, it sometimes makes sense to sell them via another online marketplace. Many outsourced fulfillment providers offer liquidation services to their clients, and in some cases it can be more practical for a retailer to create its own liquidation site. Not only does this route give you the ability to tap into a new market of customers, but it also allows you to unload products at lower prices without impacting your company’s brand image.

Matt Konkle is president of outsourced order fulfillment provider Fifth Gear.