After the holidays, excess inventory can quickly become a cash-flow problem. Some products didn’t sell as expected, while others come back as returns or are left in sizes, colors, or bundles that are harder to move.

The easiest solution is often a deep discount. But cutting prices across the board can hurt margins and create unnecessary discounts on products that may still sell later. The better approach is to choose the right way to clear each type of excess inventory without giving away more margin than necessary.

Why Inventory Piles Up After the Holidays

Forecasts overshoot. A style that looked certain in August sells slowly in December. A competitor runs a bigger promotion in the second week of December and takes the last rush of orders.

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Then the returns come back. According to the National Retail Federation and Happy Returns, retailers expected 15.8% of 2025 sales to be returned, about $849.9 billion in merchandise, and 17% of holiday sales specifically. Online orders run higher still, at an estimated 19.3%. Much of that stock lands back on the shelves in January, often opened, sometimes damaged, and rarely in the same condition it left.

Sort the Overstock Before Pricing It

One discount applied to every excess SKU treats a best-seller that was over-ordered by 200 units the same as a gift set nobody will want until next November. Sort first. Four buckets cover most catalogs:

• Still in demand: selling steadily, just over-bought. These usually need patience more than a price cut.
• Slow movers: selling, but at a pace that ties up cash for months.
• Seasonal: holiday-specific products that will sit until the next season comes around.
• Long shots: discontinued, damaged, or unlikely to sell through any normal channel.

For each SKU, pull sell-through rate, weeks of supply, margin, and how sales responded to past price changes. Then look at condition. Open-box units, items in damaged packaging, and refurbished returns need different routes from sealed new stock, and the return reason codes often explain why a product came back. Anything with an expiry date or compliance requirements, such as cosmetics, supplements, or batteries, goes to the front of the line.

An inventory system makes this quicker. Shopify, Zoho Inventory, and Cin7 can all break stock down by channel and age. A third-party warehouse should be able to send a snapshot of stock by condition, age, and location within a day or two of the request.

Bundle Slow Movers With Best-Sellers

A product that isn’t selling alone can sell well as part of a set. A skincare brand with 600 extra units of a night cream can pair it with its best-selling cleanser as a “new year routine” kit, priced below the two items bought separately but well above clearance price. The customer sees a deal on something they wanted anyway, and the night cream moves without appearing in a sale banner.

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Three bundle types tend to work:

• Add-ons: a best-seller paired with a practical accessory, such as a coffee grinder with a set of filters
• Good, better, best: three kits built around a mid-priced hero product, each adding a little more
• Seasonal refresh: winter stock repackaged for a January theme, such as fitness, organization, or self-care

The set should look intentionally put together. If it looks like a box of leftovers, customers will treat it as one.

Greg McRoberts, Founder and CMO of Verde Fulfillment USA, a third-party logistics company that stores, packs, and ships orders for e-commerce brands.

He says, “Bundles fail most often in the warehouse. If every kit has to be assembled by hand at the moment an order comes in, pick errors go up and shipping slows down right when you want the sale to go smoothly. Setting each bundle up as its own SKU and pre-assembling a batch before the promotion launches avoids that. It also gives you a clean read on which bundles actually sell, so you know which ones to bring back.”

Match Each SKU to the Right Marketplace

Marketplaces reach shoppers who will never visit your own site, and each one attracts a different kind of buyer. The listing should be written for that buyer.

Open-box returns often recover more on eBay than they would in a liquidation lot, because individual buyers will pay close to retail for a product described honestly as “opened, never used.”

Selling across several channels at once has one operational requirement. Stock levels need to sync across all of them, through your warehouse system or your fulfillment provider, or the same unit gets sold twice.

Use Liquidation Channels for Specific Stock

Liquidation marketplaces sell inventory in lots to resellers and secondary-market buyers. Cash comes in quickly, and the process is predictable. Recovery per unit is low, condition standards are strict, and once the stock is sold, you have no say over how it reaches the end customer.

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That trade-off suits discontinued styles, last season’s leftovers, and returns graded below resale quality. Keep current-season products and anything central to the brand in channels where you control price and presentation.

Give Employees a Reason to Sell It

Staff know the products and usually know people who would buy them. A staff-only bundle, a friends-and-family discount code, or a small bonus for moving a short list of target SKUs can clear a surprising number of units in a few weeks. Keep the rules simple and participation optional.

Track which products sell this way and what employees say when they pitch them. The lines that work in a text to a friend often work in ad copy too.

Market Overstock Without a Clearance Label

Urgency can come from scarcity, timing, or a fresh angle on the product. A price cut is only one way to create it. Ideas worth testing:

• Members-only drops: a limited quantity offered first to email subscribers or loyalty members, framed as early access
• New-use content: short social videos showing a different way to use or style a product that has stalled
• Creator bundles: micro-influencers each curate a set from your slow movers for their audience
• Local partnerships: a joint bundle with a nearby business, with both sides promoting it
• Themed flash events: a 48-hour event built around a story or occasion, such as a “desk reset” weekend

On marketplaces, start with the listing. A product with blurry photos and thin specs often sells after new images and a clearer description, with no price change at all.

Donate, Resell, or Recycle What’s Left

Some stock won’t sell anywhere at a price worth the effort. It still has better destinations than a landfill.

• Donation: vetted partners place goods with nonprofits. Donations may also carry tax benefits, so check the details with a tax advisor before shipping anything.
• Recommerce: open-box and refurbished units can go to resale buyers instead of the trash.
• Recycling or upcycling: damaged and unsellable units can sometimes be broken down for materials or turned into new products.

These routes work best when they’re planned before January. A donation partner already in place can take a pallet in days. Setting one up from scratch during the busiest returns month of the year takes much longer.

Use This Year’s Data to Plan Next Year’s Buy

The overstock already in the warehouse is the expensive part of the lesson. The data from it is the useful part, and it is easy to lose once the new season starts.

Four records are worth building before spring:

1. Promotion lift and drop-off by SKU. Some products sell only while discounted. Knowing which ones keeps the next order realistic.
2. Return reasons by product version. A spike in “too small” returns on one fit or batch points to a sizing or quality problem that a smaller order alone won’t fix.
3. Demand by region and channel. Stock that sits in one warehouse may be selling out in another.
4. A buy-down chart for seasonal products. This plots planned weekly sales against stock on hand across the season. For a retailer stocking robotic pool cleaners, demand climbs in April and peaks in early summer, so a chart reviewed in mid-June shows whether the remaining units will sell through by August or need a plan while shoppers are still buying.

A few tools help pull this together. Inventory Planner by Sage handles forecasting and replenishment. Cin7 and Zoho Inventory keep stock counts consistent across channels. Looker Studio or Power BI can turn the exports into charts a buying team will actually read, and most fulfillment providers can supply aging, velocity, and return-condition reports to feed them.

About the Author

Brooke Webber is a passionate advocate for a people-first strategy in HR. Her major focus areas are workplace psychology and employee listening, where she has built strong experience as a writer and industry voice.