A common problem for retailers is getting stuck with surplus inventory, often caused by unforeseen market shifts, new technology, or optimistic forecasting. This is never good because overstocked items can drain your cash flow, eventually costing you money over time.
But, what do you do with these excess items? Your regular outlets for selling them haven’t worked, so it’s time to try other ways to liquidate inventory.
Identify It and Determine a Value
You will need to identify the surplus products and treat each one individually. There may be strategic differences between them. It’s important to understand where they will go quickly and what’s best for your business. Getting rid of large quantities will be very different from just a handful. You’ll also have to place a new price on them, so make sure it’s realistic.
Now, you have to find new outlets to get rid of the surplus. You may not have the patience to deal with them, because it’s already a huge task just to organize them in the warehouse. But, you’ll be glad when you do get rid of them. Here are 6 ways you can liquidate surplus inventory and stop losing profits.
1. Look for Liquidators.
There are a lot of wholesalers, manufacturers, and distributors that can help you move your inventory. Much of these items go out for auction, and these services yield higher average returns than many of the other alternatives. Only thing you need to deal with is the negotiated price.
2. Try to Return It.
Some suppliers will allow for returns or give you a credit on your next order. You should always take advantage of this service when you’re stuck with obsolete products. Your losses will be in the shipping and handling, but there’s no fussing with pricing or other obstacles in the way of getting rid of it.
3. Discounts for Customers.
Customers always love a deal and want to feel like they are getting the most from their money. Bundling surplus inventory with other products within the same category can boost revenue and get those pesky pieces off your shelves.
4. Donate It.
Many not-for-profits struggle with acquiring the things they need. Look for opportunities within your community to help a cause that’s close to your heart. Not only will it make you feel good, but you’ll be recognized by them as a sponsor and a business to support. There may also be tax advantages to donating your surplus, so don’t be shy to ask your accountant first.
5. Third Party Websites.
Not enough to entice a liquidator? Try selling them online yourself through many of the third-party auction sites, such as eBay, Overstock, and Craigslist. Someone out there could be looking for what you have, and these sites have such an extensive reach that they can get you in front of them.
6. It’s a Reward.
Not a give-away. Using surplus inventory as a reward to customers for repeat business is a great way to enhance the customer experience. There’s more value placed on an item that is a reward versus a give-away.
Forecasting
To keep surplus to a minimum, look deeper into your inventory data to track sales with your marketing efforts. You can prevent overstocking items through data analytics, cycle counting, and automated stock replenishment. These eliminate errors and make any adjustments necessary to keep surplus from taking up space in your warehouse.