Excess inventory in a warehouse

Liquidating excess inventory: how discount campaigns can help

We all know that discount campaigns are a great way to boost sales, and increase your overall margins. But, did you know that discount campaigns can also be used as a means to reduce the costs associated with excess inventory? With the right kind of planning, discount pricing can be utilized to achieve many different outcomes. Read on to learn how you can use this pricing strategy to help eliminate excess inventory levels!

Table of Contents

Clearing out excess inventory 

When products fail to perform, storage costs can begin to have a negative impact on your overall margins. Most business owners and inventory managers understand the cost of warehousing and try to plan stock levels accordingly. However, even the best stock forecasting models cannot avoid the eventual accumulation of surplus products that turn into excess inventory. It is good to have a plan for a stock reduction in place already before such a situation arises. This is where price reduction strategies, such as discount pricing, can come in handy.

This article focuses on discount campaigns as strategies for clearing out excess inventory. In such a case the goal is not necessarily boosting margins. Rather, it is to reduce costs and save yourself the expenses of warehousing and waste. When your goal is to get rid of products that are not selling, it is okay to create bundle offers, provide high discounts, etc. This applies to old or out-of-season products, which are expected to lose demand. Get rid of such products immediately by adding them to your next discount campaign!

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Discount Pricing Campaign Simulator

The Benefits of Discount Campaigns

One of the primary benefits of discount campaigns is that they can help you move inventory quickly. Being able to move products quickly is especially handy if you happen to have excess inventory. Offering discounted prices on products can guide customers towards making a purchase. This strategy can be particularly helpful for seasonal products and products which have a limited shelf life. By reducing the price of a product you can increase the demand for it. Setting a price that makes a product more desirable helps move the product before it becomes obsolete, out of season, or expired.

Another benefit of discount campaigns is that they can help you generate revenue quickly. If you have excess inventory taking up space it is costing you money. Discounting those products can help you recover at least some of your investment. Even if you don’t make a profit on those products, you’ll at least be able to recover some of the sunk costs and free up space for more profitable items.

Identifying Products to Include in Your Discount Campaign

The first step to make a discount campaign successful is to choose which products to include in it. Our goal is to focus on products that are not selling well and taking up space. These could be items that are out of season, discontinued, or not as popular as we expected.

Choosing the right products for a discount campaign is crucial when your goal is to cut down excess inventory. Don’t include products that are already selling well, as they might take away sales from the items you are trying to sell. That would leave you in the same situation as before. So, it’s better to select products with low demand that are unlikely to sell at full price for this specific scenario.

Creating a Successful Discount Campaign

Once you’ve identified which products you will include in your discount campaign, it’s time to create a plan. Let’s refresh with some tips to help you create a successful discount campaign:

  • Set Clear Goals – Liquidation is the goal here. We want to drive enough purchases to bring stock levels for our selected products to near zero.
  • Choose Your Discount – Decide on the discount you want to offer. In this case, we just want to get rid of the items as fast as we can.
  • Bundle Offers – Bundle offers are a great way to move multiple products at once. For example, you could bundle one or more unpopular products with a product that has been performing well. Or you can bundle groups of underperforming products together with larger than normal price discounts.
  • Promote Your Campaign – targeted marketing is what makes otherwise reduced prices part of a campaign. Use all available channels such as social media, email marketing, traditional marketing, and in-store promotion.

When campaigning to clear your excess inventory you should always make sure that your messaging is clear. Let customers know exactly what products are on sale and for how long. You can emphasize that supply levels are low, and once the item is gone it is gone. The concept of “last chance” is an extremely effective way to encourage customers to make a purchase before the product is gone forever.


Well-planned discount campaigns can also help drive traffic to your store or website, generate revenue, and build customer loyalty. While it is not the most desired scenario, sometimes a business will need to get rid of extra stock. Discount campaigns are an effective way to get rid of unnecessary products and reduce the costs generated by excess inventory.

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