Amazon Liquidation Program 2023
Amazon allows other brands to sell on their website through a Fulfilled by Amazon system. This is when Amazon holds the goods in stock and ships them to the customer when ordered. It is a great system, but it also means that some of these orders are returned. And this is when Amazon Liquidation can help.
What Is Amazon Liquidation? Amazon has 2.3 million active sellers across the world. These items include clothing, books, DVDs, games, toys, and more. And some of these orders are sent back to one of their warehouses for one reason or another. Amazon Liquidation takes these items, places them in bundles, and then sells them off to bidders at a reduced rate of their value. Items that are included within the Amazon Liquidation can also be overstocked, as items that need to be sold quickly because they are being discontinued or coming to their end of life. Liquidation can be sold to liquidation values, such as discount stores. Some of these are sometimes made available to private customers. These items are not entirely known to the buyer. Instead, they are boxed in pallets or surprise boxes and sent to the customer.
What Is FBA Liquidation in 2023? FBA Liquidations is a program that Amazon has implemented to help sellers use the FBA system to recover value from returned orders from customers. It can also be used to sell overstock items. These items can be boxed into pallets or mystery boxes and sold for a reduced amount to encourage a purchase. FBA Liquidation can be bought by other businesses, normally discount stores or wholesalers. They can also be bought by individuals from third-party sellers. The individual customers do not know what is in each box or pallet. The contents are a complete mystery and will only be known when they arrive. Therefore, they have become a good source of content for some YouTubers.
What Are the Benefits of Liquidating Inventory? There are numerous benefits for the seller to use the FBA Liquidation system. For one, it provides the FBA seller to avoid having to pay storage fees that can accumulate when there is excess stock. In addition, FBA sellers can dispose of products that are not in demand and are only using up profits from other sales. These are the two most cited reasons for using this system. However, other benefits can help FBA sellers to make more of their stock and inventory. For example, using the Amazon FBA Liquidation allows you to improve your Inventory Performance Index Score, otherwise known as IPI. When using the program, the excess inventory is removed, and therefore, you are protecting your IPI score. This score influences your FBA sell-through rate. A high IPI score can become too low. When it is too low, there can be overage fees and limits on what you can store. There might be other issues, such as being able to send products to fulfillment centers, which can impact high-sale products and high-volume sale periods.
When Do You Need to Liquidate Your Inventory? There are numerous times when you might want to liquidate your inventory. And each time that you go through the process it might be for a different reason. Knowing the triggers for requesting an FBA Liquidation can allow you to know the right time to start the process without leaving it too late that you’re incurring excessive costs. Dead inventory Dead inventory or Dead stock is goods that have remained in storage on sale and have not been purchased by a customer before they’ve been removed from sale. For instance, those selling holiday products but the season is over and the items are still in stock. Selling dead inventory is an important move because if you have seasonal goods that are unsold after the season, they’re just going to incur storage costs. Selling these at a reduced value is more cost-effective than storing them for the year. Also, stored items will lose value as they can become damaged. PRO TIP Seasonal goods are a double edge sword. You can either make a huge profit or end up with a massive unsold inventory. To avoid this, get your inventory management in order. Ensure right timing of your shipments and optimize your listings. Costly inventory There are some products and inventory that are going to cost more than others to store. For example, those which have special storage instructions, big bulky items, or those that weigh a lot. These items probably need to be sold quickly to ensure that the storage costs are not too high. Other items that might be considered costly inventory are small ticket items that have proportionately high costs. For example, a $1 item might only have a profit value of twenty cents per unit. Therefore, these items need to be sold in quantity and fast before too much of these profits are used up on storage. Using the FBA Liquidation option allows sellers to sell items before storage costs erode profits.
