Avoiding and reducing excess inventory has always been a careful balancing act for sellers. It’s a problem that every brand and retailer faces at some point in their lifetime, whether it’s through economic downturns, miscalculating demand or simply investing in the wrong product.
But current global trends are making it a very topical issue for many sellers, both domestically and globally.
In certain product categories, inflation worries and economic uncertainty are slowing e-commerce purchases by consumers. As such, some brands and retailers are realising they miscalculated the demand for their products and have been left with more excess inventory than usual.
If you’re a retailer experiencing any excess inventory strain and want to keep it from becoming a bigger problem in the months ahead, there are still plenty of ways to mitigate these issues, eliminate surplus stock and keep the orders flowing.
Unfortunately, there’s no one-size-fits-all approach. Many factors are at play when deciding what solution is best for you, from your budget to your specific product categories to your ultimate business goals. Keep experimenting and find what’s right for your business.
Below are some recommended advertising and selling strategies that retailers we work with have found successful.
[Keep in mind, these tips are geared toward retailers (i.e., selling directly to consumers). Brands have unique challenges when it comes to excess inventory, and we’ll address them specifically in an upcoming blog.]
The amount to invest in advertising your excess inventory — or whether to invest at all — is a tricky question for retailers. It all depends on you profit margins. After deducting the cost of advertising, will you still make a profit on those product lines? Or does it make more sense to dispose of the inventory or liquidate it to a discount seller? These are important questions to ask yourself as you consider the strategies below.
Pay attention to your paid search
When it comes to paid search campaigns, you should already be experimenting with new keywords, both broad and long-tail, to find the right mix for your budget and profit margins.
- Play the long game. A common mistake for advertisers during busy shopping seasons is to overspend during peak selling days and blow through their budget. But plenty of shoppers are scouring for deals in the weeks leading up to those traditional shopping periods, as well as the weeks following. If you want to build promotions around your excess products, you can reach deal-seekers more effectively — and with fewer costs per click — during periods with less competition.
- Focus on sets of products. Proper segmentation is key to effective advertising. Consider segmenting your promotions via Google Merchant Promotions by different product sets like high-quantity items to move those products.
- Customize your feed. Utilise the custom labels in your Google and Bing feeds to flag those specific product sets with high inventory and then plan more aggressive campaigns around them. Segmenting campaigns by profit margin (e.g., losing vs. leading) can also be an effective strategy to try on your social advertising channels like Facebook.
- Throw in a gift. When brainstorming campaigns or deals, consider promoting your excess low-cost products as a gift to consumers with their purchases.
- Promote product bundles. Bundling products together into a single SKU is always a good tactic for retailers trying to promote complementary items, raise awareness of certain products, and move inventory. Run specific ad campaigns to promote these bundles for shoppers in the lead up to the holiday season and beyond. Product bundles are also helpful for raising your average order value (AOV) and increasing the ROI of paid search campaigns.
- Find a competitive advantage. If you’re struggling with inventory, a competitor might also be having inventory issues. But maybe their problem is a lack of inventory due to supply chain delays. Keep an eye on competitors and look to capitalise by bidding on those who have similar products but are struggling to meet demand.
Experiment with new retail media campaigns
Retail media has become essential for any seller who wants visibility for their products on marketplaces and other retail sites. But because everyone’s doing it, your efforts have to be that much more advanced. In addition to experimenting with the different ad types available to you, here are some other strategies to help you rethink your retail media approach:
- Get more targeted with your Amazon Advertising. Whether you’re playing defense on your product detail pages by targeting your own ASINs or you’re conquesting your competitors by bidding on theirs, sponsored advertising can give you a boost in conversion rate. When running Sponsored ads, updating the product page bid modifier can help you get more aggressive with your ad placements.
- Experiment with Sponsored Display. Maybe consumers aren’t aware of your product because it’s slightly different from the competitor product they are searching for. Sponsored Display ads can help you raise product awareness by targeting competitor ASINS directly below the Buy Box. You’re also able to promote any promotions you’re currently running.
- Try Sponsored Videos. If you’re also the registered brand of your product and have access to Sponsored Brands options, video campaigns are a great, new way to show off the branded content that sets you apart. Again, segmenting campaigns (e.g., branded vs. non-branded, top selling vs. overstocked) is always a best practice to drive the most efficiency when advertising.
Retarget interested customers
It’s a well-known fact that it’s cheaper to keep an existing customer than acquire a new one. Retargeting former customers of your products (or those once interested in your products) can be beneficial and cost-effective to reach potential buyers.
- Leverage retargeting ads. In addition to retargeting ads across search and social channels, Amazon’s Product Display Ads allows you to remarket to specific audiences on Amazon, including those who have previously viewed your product.
- Segment your email lists. Check in with recent (and historical) customers to remind them of your brand and product line. Perhaps a recent customer needs a complementary accessory? Or an older customer needs a new model? When segmenting your lists, try creating one just for the deal seekers who purchased from a former promotion you ran and come up with a new promotion that might catch their eye.
Optimise your product listings — again
Taking time to optimise your product listings is E-Commerce 101. But maybe it’s time to take a look at them again and ask yourself if you can make any improvements. Think about your consumer. Consider how they shop. Where they shop. And what they are considering this month, this season and this year. What can you do differently to grab their attention?
- Revisit your search terms. The terms you’ve provided in the keyword fields of your marketplace templates might be outdated and need tweaking. Optimise your listings by adding new product details that could help their search results.
- What do your product titles say about your product? Similarly, tweaks to your titles could be useful in getting more attention to the products you want to move.
- Have your images been updated recently? For certain items, and especially in certain categories (e.g., fashion), it could make sense to update your images with better, high-quality photos and videos to entice new clicks.
- Bundle products together into a single SKU. As mentioned above, product bundles are a good, proven way to highlight complementary products and raise awareness of lesser-known items.
- Experiment with repricing strategies. Repricing can be a sophisticated strategy to help you meet a variety of business goals. And they’re not all the same. You can choose between algorithmic repricing, rule-based or velocity repricing to help move products and stay within the profit margins you need.
Expand to new marketplaces or new regions
Expansion is generally seen as a good thing and a byproduct of growth. New regions or new channels mean new consumers.
But expanding to new channels and countries only makes sense if it’s profitable. Expansion becomes a poor business strategy when it stretches you too thin or you don’t have the infrastructure to supply, store and ship products in a new country.
- Look for new geographies within your current marketplaces. Tapping into international markets can significantly increase potential consumer base and sales. But you don’t have to necessarily learn a new marketplace. Did you know that Amazon operates in over a dozen different countries, offers Prime memberships in over 19 countries and ships products to over 100? The Amazon Global Selling program is an option to “test the waters” of cross-border trade and open up your products to consumers who are already shopping on Amazon. eBay also has a Global Shipping Program that manages the international shipping and customs process for you.
- Find a channel that’s looking for products like yours. Looking for a fresh start on a new marketplace? ChannelAdvisor’s Commerce Network is an interactive portal that allows sellers and channels to discover, attract and connect with one another.
Consider social channels an extension of your product pages
Social channels present a great opportunity to build new audiences for your products, whether through promotional giveaways, influencer reviews, viral trends and more. Depending on your industry, one thing to keep in mind is to avoid cannibalising the sales of your newer products by focusing too much on promotions for your older, excess items.
- Experiment with new channels. TikTok isn’t a secret anymore, but its influence continues to grow massively. Shoppers turn to social networks to find deals, even if they can’t purchase them there. According to Marketplace Pulse, videos tagged with #primeday2022 were viewed 52 million times on TikTok during this summer’s sales event. Even if you’re not advertising on channels like TikTok or Instagram, brainstorm ways to increase your product awareness there this festive season.
- Eliminate friction from the purchase path. Consider every channel where your product appears a shoppable channel. In your social ads, email promotions or other digital touchpoints, use shoppable media solutions to streamline the path to purchase for your products and remove any obstacles for an interested consumer to convert.
Reexamine your fulfillment process
Making fundamental changes to your fulfillment process is obviously more of a long-term strategy, and applies to all of your inventory — not just excess inventory.
But in addition to discounts, deals and new channels, you may want to also see if a shift in your fulfilment approach helps get the orders going. Whether you lower your threshold for free deliveries, use your data to help guide shipping pricing strategies, or work with a new third-party logistics provider (3PL) to help you increase efficiency, the focus on fulfillment could actually help you cut costs and potentially pass savings onto customers (making your products more attractive).
Having just the right amount of inventory at all times may sound ideal. But it’s not always the case. There are still plenty of ways to eliminate surplus stock and keep the orders flowing And there’s still plenty of consumer demand to tap and revenue-generating opportunities to find.
Experiment with different strategies based on your business goals and the amount of excess inventory you’re working with. If you want to talk to an e-commerce consultant about how your business can improve your e-commerce operations, expand to new channels or optimize your channel strategies, contact ChannelAdvisor today or reach out today for a demo of our platform.