Inventory liquidation strategies every brand should know

What to do with huge amounts of unsold or returned inventory is one of the biggest challenges that retailers face.

Stock liquidation is a problem that many retailers will encounter and when the process is incorrectly managed it can result in lost profits and huge amounts of waste.

When managed properly, liquidation can turn unwanted or excess items into profits and make undesirable products much more attractive to customers.

This problem doesn’t show any signs of going anywhere anytime soon as return rates continue to increase. This results in huge amounts of unwanted products sitting in warehouses which takes up space and costs you money.

Many businesses fall into the trap of selling their excess stock to third parties at such a low price they take a loss, just to get rid of what they no longer need, but doing this time and time again is going to eat into your profits and have a negative impact on your bottom line over the long term.

With an increasing focus placed on sustainability and reduced waste, a different approach is needed. Effective stock liquidation can be used to offset losses and allow your brand to become established in a secondary market.


Use Platform as a Service marketplaces (PaaS)

A PaaS platform is tailored around the needs of your retail business. It essentially gives you a storefront to sell excess products or those that have been returned. It also allows you to exercise full control over the customer who is buying and the secondary market which you want to be part of. This type of setup can bring a number of benefits to businesses such as:
Increased pricing – When listing products in an online auction environment, targeted buyers will actively seek out products on this platform. There are always shoppers ready and willing to buy. As they log on to browse your latest products, this creates a sense of demand, in that they are essentially competing with other buyers to purchase your products. This competitive environment will drive up pricing, boosting your profits in the process.

Greater efficiencies – The liquidation process is automated, so it boosts the operational efficiency of your business.
Buyers – When you have a large audience of people featuring the right types of buyer, you can access this marketplace and sell inventory whenever you need to, regardless of when this is or what type of product you are selling. There is always demand.


Price Reductions

One of the more traditional methods of dealing with stock is to use the trusted clearance sales.

These work quite well if you are looking to sell products fast. You can incentivise the price reductions by using promotions that customers can’t resist. If you carefully evaluate your profit margins, you may want to offer discounts of between 25% and 75% to customers or make a purchase more attractive such as buy one get one-half price or buy one get one free.

There are lots of strategies that you can use to make your promotions more compelling to customers. However, if the price reduction is to work, it must be perceived as valuable by the customer.

Another option and one that falls under the scope of price reductions is to offer bulk sales. This is where you provide an offer to the customer to buy a particular number of items. When they purchase 2 items, for example, they can get a third free. This type of sale works well for products that the customer is likely to stock up on such as accessories, clothing essentials and food products. Bulk sales work particularly well around the holiday season where customers are shopping for gifts.


Pop Up Stores

In recent years, there has been significant growth in pop-up shops. These are a great ways for businesses to sell surplus stock and test new markets. Limited time pop up stores work well because they give customers a sense of urgency and they are more likely to buy something before the store closes. You can also use pop up shops to sell limited edition items or products that customers wouldn’t usually be able to buy in-store.


Bundle Products

Depending on what you sell, you may find that preparing product bundles or gift bundles of popular products is a great way to sell excess inventory.

It’s often used for products where there has been low demand but by repackaging and presenting them as a bundle, they become more attractive to customers. Be mindful of creating bundles because you want all of the products to complement each other rather than being a mismatch of items unless you are running a promotion that is a mix and match or selling a mystery product bundle.

The value of the bundle must be seen as valuable by the customer.

Gifts or Incentives

Where you have smaller products, you may want to consider offering these as free gifts or incentives to buy something else. You could, for example, run an offer where you give a product away for free if the customer spends a certain amount.

This type of approach is win-win. Customers receive something for free and you reduce your excess inventory while increasing overall sales. You can also use this type of initiative in contests or giveaways through social media.



Remarketing is another great technique of liquidating inventory that hasn’t sold.

Remarketing is where you refresh or renew your marketing by adding new images, perhaps a fresh, new marketing strategy or using initiatives to promote products through your online store.

Incentives can be used to drive demand or products made to look more attractive by highlighting more of the product benefits, creating a unique and interesting marketing campaign or using the product to raise awareness of an issue in society.

Using one or a combination of these strategies will not only save your business money over the long term, but it will also help you to reduce surplus stock and sell slow-moving products. Every retailer will have at least one product that doesn’t sell, it’s just part of the retail landscape.

Low demand products are ideal for inventory liquidation strategies because by repackaging them either through bundling, offering them as free gifts or remarketing, you can make them much more attractive to customers. In doing so you are also contributing to sustainability by reducing the amount of waste, so it’s a strategy that benefits you, the customer and the environment.



PS, Are returns & overstock damaging your business? If you are ready to join the reCommerce revolution with a sustainable selling solution then contact ClearCycle today.

Dan Hague ClearCycle

Dan Hague

24 May 2021

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