wiki/knowledge/amazon-strategy/doudlah-coupon-liquidation-policy.md · 653 words · 2026-04-05
Doudlah Farms — Aggressive Coupon Policy for Inventory Liquidation
Overview
Following a crisis with Amazon AWD (Amazon Warehousing & Distribution) that resulted in expired and at-risk stock, Doudlah Farms adopted an aggressive tiered coupon policy to liquidate excess FBA inventory before it spoils. The policy was established during the [1] and applies immediately to all high-inventory SKUs.
The guiding principle: selling at a 20–25% discount is always preferable to disposing of expired product at a total loss.
The Problem
Amazon AWD proved unreliable — warehouses filled up, replenishment to FBA stalled, and inventory sat long enough to approach or exceed expiration dates. Affected SKUs included:
- 1 lb Pinto Beans — ~1,000 units at AWD, unlikely to sell through in time
- 1 lb Black Beans — flagged by AWD as expiring within 2 months; Amazon will not ship product expiring within 60 days
- 25 lb Kidney Beans — 26 units flagged for disposal
- 25 lb Great Northern Beans — 14 months of inventory on hand
- 25 lb Yellow Popcorn — coupon had been turned off despite 14+ months of stock
The root cause was over-stocking AWD during the initial launch phase, compounded by AWD's failure to reliably replenish FBA.
The Policy
| Inventory Age |
Coupon Discount |
| < 6 months |
No coupon required (or minimal launch/promo coupon only) |
| 6–12 months |
20% off |
| > 12 months |
25% off |
Rules
- All SKUs with > 6 months of inventory must carry an active coupon. No exceptions unless inventory drops below the threshold.
- Coupons should be reviewed and adjusted at least every two weeks alongside regular account optimization.
- New products may carry a smaller introductory coupon (e.g., 10%) independent of this policy.
- Once inventory falls below 6 months, coupons can be removed or reduced.
Affected SKUs (as of 2025-11-12)
| SKU |
Inventory Level |
Action |
| 1 lb Pinto Beans |
High (AWD) |
Increase coupon to 20–25% |
| 25 lb Great Northern Beans |
~14 months |
Set to 25% |
| 25 lb Yellow Popcorn |
~14 months |
Re-enable coupon at 25% |
| Whole Wheat Flour |
> 6 months |
Increase from 10% to 20% |
| Old World White Popcorn |
~9 months |
Set to 20% |
Inventory Management Going Forward
In parallel with the coupon policy, the team agreed to the following structural changes:
- Ship all new inventory directly to FBA — AWD is suspended until further notice due to reliability issues.
- Cap inventory at 3–4 months for standard products; never exceed 6 months even if AWD is re-enabled in the future.
- Carly's next Doodla order must be routed to FBA, not AWD. Mark to confirm with Carly directly.
See also: [2] for broader context on the AWD decision.
Financial Context
- November sales trending at $131k (vs. $116k in October) — strong underlying demand makes liquidation via coupons viable.
- Current account margin is 31–37%; target is 40%. Aggressive couponing will compress margins short-term, but disposing of expired stock is a total loss. The priority is clearing aged inventory first, then optimizing margin.
Action Items
- [ ] Increase coupon on 1 lb Pinto Beans to 20–25% (@Gilbert)
- [ ] Set 25 lb Great Northern Beans coupon to 25% (@Gilbert)
- [ ] Re-enable and set 25 lb Yellow Popcorn coupon to 25% (@Gilbert)
- [ ] Increase Whole Wheat Flour coupon from 10% to 20% (@Gilbert)
- [ ] Audit all SKUs — any > 6 months must have an active coupon at the correct tier (@Gilbert)
- [ ] Confirm Carly's upcoming order ships to FBA, not AWD (@Mark)