Experienced online sellers all know that knowing how to move product is the key to any successful business. Still, despite the seller’s best efforts, some products just don’t move. Sometimes, there’s too much inventory on a particular seasonal item. Other times, the next big trend turned out to be a passing fad. Whatever the reason, if you are an online seller, learning to get rid of slow-moving products can be the difference between earning a profit and going out of business.
Based on our experience with online sellers of all sizes, SellerCloud has compiled a list of five strategies you can use to get rid of excess inventory and keep your business moving forward:
- Never become emotionally attached to your inventory. The first step to moving excess inventory is to remember why you got into this business in the first place – i.e., to make money buying and selling products. The key here is to remember the long game. Some products are going to bring quick profits, others will take more time, and still others might have to be sold at a loss. You can’t sweat every single item. Stale products have to go. Often this is the hardest step for sellers, who hate to lose money on an investment. To that, we say: We feel your pain. However, that doesn’t let you off the hook. You must still develop a realistic eye regarding the market value of your products. Use the 90-120 day rule as a guideline. You should be turning your inventory every 90 – 120 days. Beyond that point, it’s time to let the product go, even at a loss.
- Add new photos and keyword descriptions. That photo you took six months ago? Change it. Sometimes all it takes for buyers to take a new look at your product is a little window dressing online. In terms of photo presentation, your product should fill up 85% of the frame. Make sure the lighting is excellent. Although it may seem like an insignificant change, SellerCloud has found that showcasing your items with high quality photos, can lead to a 20% jump in sales.
In addition to the visual presentation, don’t forget to optimize your search terms on a regular basis. Nearly all online sales begin with a search by the buyer. Take time to craft descriptions and titles that include well-placed key words. Buyers think in keywords and keyword phrases, which can be discovered by using various keyword tools through Google and other online tools. If a particular product isn’t moving, it may simply a matter of buyers not finding it. Revising your keywords regularly should be built into your company’s selling process. Sometimes it helps to add seasons or holidays to your product descriptions.
- Find ways to bundle items creatively. Some sellers, particularly those who are new to the business, may be tempted to run generic sales to move excess inventory. However, simply running a sale can backfire if the product still fails to move. Instead, online sellers stand a better chance of selling slow-moving products by engaging in creative bundling.
There are a number of ways to bundle products. Instead of selling one product at a discount, bundle the product into a specific line of items and run a sale on the entire group. For example, offer a 20% discount on all cameras, or 10% off of all back-to-school items. Grouped items tend to generate more buzz than individual items.
Another way to move excess inventory is to bundle sellers with more popular items. Cosmetic companies will often create a bundled promotional kit, which includes a few non-selling or discontinued items. Buyers will buy the bundle for the item they want – and if the hot-selling item is popular enough, it may make up for the loss on the products that have not been moving.
- Cut prices now, rather than later. An ancient parable states that even moving backwards is still moving forward. Cutting prices is part of the cost of doing business. Of course, taking a 10% loss hurts – but it hurts a lot less when it’s done earlier rather than later. In addition, waiting too long often forces a seller to offer even deeper discounts. Developing a decisive edge to your decision making process will lead to greater profits in the long run. Every day the product sits on your shelves unsold, you are losing money.
- Remember, cash flow is king. Along with moving decisively to cut prices when necessary, sellers should never forget that cash flow is the heart and soul of an online business. Your thinking should move forward with that flow. Avoid worrying about how much you paid for the product and instead focus on depositing the cash in your account after selling excess inventory.
Every item that takes up inventory also prevents you from replacing it with a faster selling item. This applies across the board, even to items that you are one-of-a-kind or extremely rare. Sellers who work from home sometimes think that they can afford to hang on to certain items because their storage costs are low. This is a mistake. Online selling is about selling, period. Keep the cash flow going and eventually you will recoup losses on individual items.
Making use of these tips will help you get out of neutral and put your business back in gear.