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

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

This is the bottom line for inventory clearance. No matter what channel is used to clear the inventory, if the cost of clearing the inventory is higher than the cost of destroying it, then the price is meaningless. It is better to destroy it directly or let Amazon clear the inventory at a low price.

When sellers are clearing their inventory, they often struggle to decide whether to choose in-site channels or off-site channels. Here, Xiao V recommends that sellers calculate the cost and conversion effect of in-site advertising + low prices + large coupons. If the cost of in-site advertising is high and the conversion effect is not ideal, sellers should quickly use off-site channels.

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

In fact, many operations have reported that advertising during clearance sales means constantly testing different types of ads, different bids, different position premiums, testing the lowest CPA value, or directly measuring it with ACoS.

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 options/channels to choose from, try to choose the one with a low CPA.

At the same time, during the inventory clearance period, we must avoid two misunderstandings: