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How can eCommerce Shops Deal with Excess Stock?

Written by
Amanda Lim
Published on
February 5, 2019
Updated on
June 20, 2023

Having excess stock is part and parcel of running a retail business, including eCommerce stores. While this can occasionally present a problem in inventory management, there are many effective methods to clear excess stock.

Clearing out excess stock helps you reduce any costs that come with holding onto old inventory. This will also make room for you to plan your next line of items, whether it is by offering more of your best sellers, or introducing a new product to your eCommerce store.

But before we get into how to clear out old stocks, it helps to know the impact of holding excess stock in your inventory.

Why should you Clear Excess Stock as an eCommerce Business?

Since having excess stock is something that happens periodically, it helps to know what causes stocks to pile up over time.

Pre-empting sales during peak periods like 12.12 or the Lunar New Year could be one reason you will end up having excess stock. In cases like these, extra warehouse space may be rented to store these items. This also affects merchants who sell using dropshipping or on-demand products, as the manufacturer may not be open during holiday periods.

Another reason merchants could also end up having excess stock is because an item isn’t selling well. If these items are not cleared quickly, they can add up to your warehousing costs if you need to rent extra space in order to bring in new goods to sell.

Even if you happen to have your own warehouse where your excess stock is held, you may still be subject to obsolescence costs1. Obsolescence costs happen when an item is unsold after its shelf life due to a change in customer demand or a product update. In other words, the slower you sell the products, the harder it is to sell them in the future, which could impact the amount of space you need in your warehouse.

To top it off, you could also incur opportunity costs, where the choice of bringing in more best sellers or newer items have costed you in revenue when you decide to hold onto obsolete products.

In essence, clearing excess stock can help to minimise costs, tangible or otherwise.

How to Clear Out Excess eCommerce Stock?

While there are many different ways to clear out old stock, these methods can be broken down into some basic ideas.

Running Clearance Campaigns

Even though this method would reduce the revenue you will get from old stock, running a sales campaign for stock clearance can incentivise customers to purchase. Sales campaigns for stock clearance will create a sense of urgency in your customers that will make them more likely to buy an old product because these goods will no longer be stocked.

Campaign Discounts

By selling your old products at a discounted rate immediately following a campaign, you may have the opportunity to catch late-season shoppers with clearance discounts. As an example, consumers who have finished celebrating Lunar New Year may have extra cash from receiving red packets2.

You could also opt to feature product-specific discounts to ensure that you are targeting the excess stock. If your excess stock is a mixture of items from different product categories, it may be more beneficial to try a different method.


Bundling your products could help to clear out excess stock. To do this effectively, the old items have to be relevant to the other product that you are trying to bundle with. Bundling can be done in different ways:

  • Bundling similar products Bundling your old stock with another product of the same category at a discount can incentivise your customers to purchase the bundle. By doing this, your customers will feel like they are getting some bang for their buck in buying two or more products at a discounted rate.
  • Bundling with a best seller If you have enough data to tell which item is a best seller for your business, bundling your old stock with a best seller can make your old stock move out of your warehouse faster too.
  • Free gift with purchase By advertising an old stock as a free gift, your customers may be delighted at the additional item they received alongside their purchase. This is most effective if the individual items are small enough to fit into the packaging. You could either opt to send it as a surprise gift or after a minimum threshold is met in your customer’s shopping cart.

Selling to Employees at a Discount

If your eCommerce store has a large enough employee base, you may consider selling your old products to your employees at a discounted rate. This is a standard practice among traditional retailers, and it wouldn’t hurt to implement this for your online store’s employees.

By doing this, it also helps your business to save on additional costs like eCommerce shipping, because much of the transportation required is done from your employees when they take the items back to their homes.

Item Giveaways

If the previous methods didn’t work and you’re still having trouble removing excess stock, you may have to look into freeing up space by giving your items away. While doing this may not bring in revenue for your company, this still helps to reduce obsolescence and opportunity costs associated with excess stock.

Giveaways to Potential Customers

Having a giveaway with an incentive to follow your social media pages or to sign up for your email list can grow your leads and expand your customer base. In conducting this giveaway, you would have to factor in your shipping cost as part of the marketing expenses on top of the old product too.

Donating to Charity

If the previous ideas aren’t getting any traction for you, you could look into donating the bulk of your items to charity. You may need to check with the charity to see if they are willing to accept physical goods as a form of donation, and then package the products to be sent in good condition.

Giveaway to your Employees

Similar to letting your employees purchase your goods at a discount, you could always let your employees have a few of your old products for free in order to make space in your warehouse. Depending on the item, this could be a faster way of clearing stock compared to selling it to your employees, and it retains the benefit of not needing to pay for shipping fees.

Clearing old stock periodically is an important task to keep your business from incurring costs. Take into account your inventory’s time frame and aim to get rid of old stock as soon as possible so that you open up much-needed space to push your bestsellers and new products.

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