One of the biggest problems that you might face as a new seller is overstocking. When you are just starting, it can be quite difficult to estimate how many stocks of items you should put in your inventory. And as you know, if you don’t sell out your stocks within 360 days of placing them in an Amazon warehouse, you’ll be charged a long-term storage penalty fee for overstock inventory.
The Amazon Outlet program can help you unload all of these items by giving you an avenue to sell all of your overstocked and unsold items. The idea of selling out your products at lower prices may be a bit overwhelming, but it’s not as bad as it sounds.
So, if you are not familiar with the Outlet program yet, this article is just what you need. In this article, we will talk about the outlet program; the eligibility requirements, benefits, and how it can help your online store. Hopefully, by the end of this article, you’ll better understand how to use this program to your advantage.
Ready to learn more about the outlet program? Let’s jump right in!
What is Amazon Outlet?
How does the outlet program work? In simple terms, Amazon Outlet sells overstock and clearance items, usually Amazon warehouse items that are almost at the 365-day benchmark. The outlet store is one of the go-to places for shoppers who want to shop for their favorite finds at huge discount prices. People who enjoy bargain shopping (and that’s almost everyone) can use this program to find highly discounted items. You can find markdowns and even overstock and clearance items all in one place.
Just like the normal Amazon website, the outlet store also has product categories like Home Improvement, Video Games, Electronics, Toys, etc. The only difference is that the items sold on this part of the website are all discounted by as little as 20% and can go up to as much as 70% on some home deals.
Shopper’s Point of View
As a shopper, there is no question that the outlet store is a great place to purchase products from. You can shop from different product categories. Plus, you’re not only confident that you’re not buying used products, but you can also trust and rely on the amazing customer service experience provided by one of the biggest online shopping websites in the world.
If you are looking to get some of your favorite finds for discounted prices, this is one of the greatest, most trustworthy platforms that you can use. The outlet store offers amazing home deals as well as other product options. Amazon Outlet sells overstock inventory, not inferior items. So, you can be sure of bargain shopping and still getting good quality grade items.
The Outlet platform is different from other ecommerce sites because the products are sold at highly discounted prices. It’s easy to assume that the outlet items are cheap because clearance products are typically priced based on neatness or quality, but that’s not the case. On the contrary, only legitimate, high quality grade items are sold on the platform, so they are not priced based on quality.
However, shoppers cannot expect any outlet category to feature the newest, high-end, popular, and premium name brands like Sony, Apple, Google, etc. Most of the items sold here are utility items that are from not-so-premium name brands. However, you can be sure that all of the items sold here are brand new.
If you don’t really care about the brand and just want to buy something that works and gets the job done, this is the best place to find these types of products.
Seller’s Point of View
Yes, Amazon sells overstock inventory through the Outlet program, and it may seem as though only buyers get to benefit from it, but it also offers a lot of great benefits for sellers.
Below are some of the benefits of using the Program:
You can get lots of sales and reviews – when you are just starting, getting lots of sales and reviews is gonna help you create a “buzz” around your product. As you know, when you are just a new Amazon seller, it can be hard to grow your business from the ground up.
The best way to do that is to create a buzz and attract attention to your products. And what better way to do that than to offer products at huge discounts, right? Besides, online shopping is now the norm so you’ll definitely sell your overstock deals quickly. Plus, customers are much more inclined to leave positive reviews after bargain shopping because they feel like they got their money’s worth and value. And that could be one of the best things that you need to start ranking your store in Amazon’s organic results.
You can sell your overstocked products – as I have previously mentioned, one of the worst problems that a seller can have is overstocking the inventory. When you are selling on Amazon FBA, and you don’t sell your inventory within 365 days, you will be charged a “long-term storage fee” by AMZ. And this is not something that you want to happen because this penalty is added on top of your monthly inventory fee, doubling your fees.
Amazon’s online outlet makes it easy for you to target and access customers who are already looking for discount deals. Because of this, you can easily sell most of your overstocked items before they even reach the penalty duration. If you are running a discount deal and you want more attention to your products, selling on this platform is a great decision that you should make.
You can get rid of items near expiration or effectivity date: Sometimes, you want to sell items that are nearing their expiration or effectivity date. Being stuck with products that are close to their expiration dates can be a bit overwhelming. And as a seller, you won’t want these to go to waste, which is why the program is the best place to do this.
By offering your products at hugely discounted prices, you can attract more buyers to your listings and get rid of the items before they practically become unusable and unsellable. And that is a win-win situation for any third-party store owner. Besides, selling on this platform can give you more cash flow, reduce your overstocked inventory levels, reduce overall storage fees, and sell more products that net more reviews.
How Does The Outlet Program Work?
When you are selling on Amazon FBA (Fulfillment by Amazon), you need to sell your items fast. If you have overstock deals that you cannot sell and they are nearing the 365-day long-term benchmark, you need to get rid of them quickly. Not being able to sell out Amazon warehouse items will cost you a lot of penalty fees that you don’t want.
As we mentioned earlier, Amazon sells overstock inventory through the outlet program. So, sellers now have an avenue to unload and sell products that do not sell out quickly in the main Amazon warehouse. But can anyone sell their products in the outlet store?
Below are some of the requirements needed to be eligible to sell on this platform:
- Sellers must have their inventory in the Amazon warehouse for 90 days or more.
- Sellers must have 10 or more units of product inventory on-hand in any Amazon warehouse.
- Sellers must have a valid sales history.
- All the products that are sold there must be in new condition, not refurbished items. No refurbished items, used products, or open box items will be allowed.
- Sellers must possess a product rating of at least 3.5 stars or more.
- Sellers must show a reference price for the products sold in the deal to show how much of a discount is applied.
- Sellers must not be currently enrolled in the Subscribe & Save program.
- Sellers must not be currently enrolled in other deal promotion programs such as lightning deals.
- Products sold must not have appeared in another outlet deal within the past 60 days.
- Customer product reviews policies and price policies must be followed and complied with.
While these are just the basic requirements for outlet-eligible products, not all products that fall under these requirements will be approved for the program. There are still many other variables involved in the selection and approval process, such as the evaluation of ASIN, among others. A product that is recommended by AMZ today might not exactly be recommended again by AMZ tomorrow. Customer demand, age of inventory, and others might also play an important role in the selection process.
To see which ones of your products are recommended for the outlet platform, you can check eligible product recommendations via the Manage Inventory Health page. This can be accessed through your Seller Account.
How to Create Outlet Overstock Deals
In this section, we’ll briefly tackle how to create your first Outlet deal. The steps are straightforward to follow:
- Go to your Amazon Seller Central account.
- On the drop-down menu located at the top of the page, look for Inventory. Then select Inventory Planning.
- Click on the tab called “Manage Inventory Health.”
- Time to check for eligible items to sell. Filter the eligible products by clicking on “Create Outlet Deal.” This can be found on the Show Recommendations page. You can also click on the links in your Manage Inventory Health page and click on the card named “Improve Your Cash Flow” (which can be found on the Seller Central account’s home page).
- All the eligible items should now show.
- The next step would be to click on the drop-down menu located on the right of your eligible product. Select the “Create Outlet Deal” option.
- There should be a pop-up window that will appear. This is where you need to enter your discounted price. Overstock deals are typically priced at a much lower rate. So, if you want to list products in an outlet category, be ready to offer highly discounted prices. Your prices should always be less than your default maximum price.
- Enter the date range for your outlet deals. Fill up the start and end dates.
- Finally, click Submit.
Once your outlet submission is finished, you will get a message prompting “deal submission is successful” to let you know that you have submitted correctly. Sometimes, you might get the message “Maximum deal price should be XXX”. When this message appears, all you have to do is change your price so your deal would be less than or equal to the allowed maximum.
After the submission, your deal will be placed in a pending status. This pending status will usually be processed within the week, after which it will be scheduled. Keep in mind that not all successful submissions will be accepted as guaranteed deals. Several factors, such as demand and the age of the inventory, can affect whether they will get approved or not.
How to Fix Prices For Your Outlet Deals
When the deal is finally approved, you will see the product will be available for online shopping and the discounted prices will automatically apply. Ensure your products are not of pending availability and can be shipped immediately after an order is placed. As soon as the deal ends, the product’s price will also go back to normal.
There are certain things that you cannot do while your product is on a deal. For example, you can’t raise your prices while the product is in the outlet promotion. Doing so will automatically cancel your current deal. You might also have a harder time getting accepted for another outlet deal in the future because of this.
How to Cancel an Outlet Deal
You can only cancel your outlet deals before Amazon approves them. But before you do this, you should check the status of the deal on your Outlet deals report. Here’s how to cancel an unapproved deal submission.
- Select Inventory Planning under the Inventory drop-down menu in Seller Central, then click the Manage Excess Inventory option.
- Choose Create Outlet offer from the drop-down menu to the right of the eligible item.
- Click Update after making a price change.
- To cancel the outlet contract, click.
Best Practices When Selling On Amazon Outlet
Following these best practices when it comes to selling on Outlet deals can help you get accepted in more deals in the future. Be sure to try and follow these examples if you want to have a good standing in AMZ’s eyes:
- Make sure you have enough stocks to cover all the sales that your deals can generate. You cannot afford to set up an outlet deal if your products are of pending availability. So, if you don’t have enough stocks to keep running the deal inside the two-week minimum date range limit, do not run the deal.
- Make sure to use high-quality images on your listings to help generate more interest and sales towards your deals.
- Get rid of pricing rules for your products’ ASINs before submitting them to a deal. Pricing rules might be preventing the price of the products from dropping automatically.
- Try to combine several of your deals with coupons to improve and increase your conversion rates. You can also consider giving higher discounts than what is recommended to improve conversion rates.
- Make sure to comply with all the rules and regulations of the program to avoid having problems with your deal submissions. Continuous violations of the terms might make it harder for you to be accepted again to run deals in the future. This is something you never want to happen.
Selling off overstock deals through Amazon’s online outlet makes it easier to get your overstocked products sold. They can also help you get more reviews for better organic rankings in the future. But more importantly, it adds to your current cash flow so you can sell more products in your store.
If you need a seller software solution to help you find winning products on Amazon, Zonbase is the answer to your problem. With tools to help in tasks such as keyword research, product research, and listing optimization, finding winning products to sell online has never been easier.