Optimizing your stock levels requires paying attention to both understock and overstock. Once you forecast customer demand and ensure that you have enough stock on hand to meet upcoming sales, the next step is to clear out overstocked inventory. Liquidating excess stock generates cash that you can invest elsewhere in your business including marketing and inventory with a higher turnover rate.
There are a variety of ways to sell off overstock, but one of the quickest ways is to sell in bulk. Here are some time-tested tips to help you move out overstock as quickly as possible.
- Experiment with bulk options to see what works for your customer base. Try different selling options. Check sales history to see how many customers are buying in a single order now. Add options at and above the average. People like to choose the middle option. By presenting larger options, you’re giving customers the opportunity to buy more at a better value. Customers who choose larger options are a bonus and bring up your average order value.
- Don’t overwhelm customers with too many options. Inundating customers leads to decision paralysis and then they bounce from your site. Pare down options to see if it increases conversion rates. It sounds counterintuitive that buying will increase with fewer options – but this works!
- Factor in the marginal cost of shipping larger quantities. With many (most? nearly all?) eCommerce companies providing free shipping, think about how your cost per order drops when you are shipping one large order to a customer instead of two smaller orders on two different dates. The cost of one large shipment is lower than the cost of two smaller shipments. What can you do to incentivize them to purchase in bulk and increase the size of their cart?
- For brands that do not want to have a race to the bottom in terms of pricing, think about how to reframe the discount of bulk pricing to add value to your brand. For example, if a customer buys 50 units, provide them a voucher for $5 toward their next order. This method helps to encourage users to come back and become frequent shoppers.
- Most importantly, A/B test to find what works for your customer base. Every business has to find the right fit that works for their customers. What works for one business may not work for the next. Try out different approaches – number of options, higher quantity options – to pin down what works for your customers.