fbpx

You are just a few minutes away to start using our services, please submit the signup form below to get your account activated instantly.



 

Skip to Content

How can the inventory clearance cost be minimized?

How can the inventory clearance cost be minimized?

Content

Share This Post

For inventory clearance, a core element is “fast”, the sooner you stop the loss, the faster you can get back the cost.

Recently, due to the peak of infection, the production capacity of many factories has been affected and they cannot deliver on time. It is also limited because of this, and many are too late ship.The sellers gave up this round of stocking directly and lay down to welcome the holiday.

Based on the unprecedented long promotion period in Q4 this year, Christmas sales would be frigid, especially for old-fashioned seasonality products. After a promotion period, inventories will be removed easily.

Of course, clearing inventory is not just a matter of just waving your hand and selling it at a high price. as a good. For operations, how to minimize the cost of inventory clearance is our priority.

Before clearing the inventory, we need to calculate the order cost of the product:

The billing cost incurred by directly destroying the product

This is the bottom line for clearing inventory. No matter what channel is used to clear the goods, the cost of clearing the goods is higher than the cost of destruction, and the price is meaningless. It is better to directly destroy or let Amazon clear the goods at a low price;

The cost of issuing orders for off-site channels and on-site channels for clearing goods

Sellers sometimes debate whether to sell their inventory on-site or off-site. Xiao V suggests the seller calculate the cost and conversion effect of site advertising + low price + large Coupon. The seller should swiftly use off-site channels if site conversion is low owing to high cost.

Increase advertising, increase Coupon, and reduce the cost of selling orders

When clearing inventory, the above methods may be used at the same time, or only one or two of them may be used to see the effect. But it mainly depends on which one is the main method. If the cost is similar, give priority to the one with a higher overall conversion rate, because it can bring some natural orders to neutralize the cost of the order.

On the premise that the limited budget can be fully used, continuously optimize and reduce the overall advertising CPA

Many operational feedbacks suggest testing multiple types of ads, bids, position premiums, the lowest CPA, or ACoS during clearance.

Here we need to refer to the following formula:

CPA (cost per order) = (cost per order – profit per order) / number of orders

When there are multiple plans/channels to choose from, try to choose the one with the lowest CPA.

At the same time, during inventory clearance, we must avoid two misunderstandings: Clear and clear, I feel that I can do it, and I don’t increase the price if I increase the quantity.01

This is a pit that many sellers have stepped on, and I feel that it is clear and clear explosive style. Don’t think about why you need to clear the goods in the first place, but also step up the stocking and go deep into the pit. 02Just started to clear the inventory, and the ink marks are small.

Many rookies start clearing inventory by slowly adjusting the advertisement. Inventory clearance speed matters. Numerous “predecessors” have shown that altering the advertisement while maintaining gross profit is unlikely to clear the inventory. Starting with price is best. Execute.

2023 is coming, and the post-Christmas return peak is also coming. I hope all sellers can stabilize their mentality and survive the difficult time.

How Fulfillmen Can Help You

If you’re looking for ways to enhance your e-commerce solutions, we can help you here at Fulfillmen.

Fulfillmen is the best Chinese fulfillment center. We help e-commerce entrepreneurs from China and all around the world.

We work with e-commerce solutions, logistics, dropshipping, product sourcing, and many more. Just reach us out and we’ll help you with your needs! You can reach us out here.

Subscribe To Our Newsletter

Get updates and learn from the best

More To Explore

Share this post

Join Us

Do You Want To Boost Your Business?

drop us a line and keep in touch

What is D2C