Selling an item at a very low-profit margin or even at a loss is better than it taking up shelf space. Inventory should usually be sold within 90-120 days. If items haven't moved in this amount of time, it's time to get rid of them. Holding on to old and excess inventory is costing you.
If you're looking at a surplus of merchandise in your store, there are several steps you can take to liquidate them:
- Refresh, re-merchandise, or remarket.
- Double or even triple-expose your slow-movers to sell old inventory.
- Discount those items (but be strategic about it)
- Bundle items.
- Offer them as freebies or incentives.
Here are 10 ways that might help you reduce your excess inventory.
- Return for a refund or credit.
- Divert the inventory to new products.
- Trade with industry partners.
- Sell to customers.
- Consign your product.
- Liquidate excess inventory.
- Auction it yourself.
- Scrap it.
Inventory is an accounting term that refers to goods that are in various stages of being made ready for sale, including: Finished goods (that are available to be sold) Work-in-progress (meaning in the process of being made) Raw materials (to be used to produce more finished goods)
Excess merchandise loses value the longer it is held in stock, as the demand for that product diminishes, and it takes “shelf space†away from a newer product with perhaps a higher profit margin. Additionally, holding costs for excess inventory such as warehousing, insurance, and taxes, further diminish profits.
Selling old inventory to closeout sellers and liquidators is a good way to get rid of it in bulk. These sellers then offer the clothing at a heavily discounted price in their own stores.
At the end of the accounting year the Inventory account is adjusted to the cost of the merchandise that is unsold. The remainder of the cost of goods available is reported on the income statement as the cost of goods sold.
Increase sales
- INTRODUCE NEW PRODUCTS OR SERVICE. Provide a broader range of products or services for your clients.
- EXPAND TO NEW DOMESTIC MARKETS.
- ENHANCE YOUR SALES CHANNELS.
- MARKETING ACTIVITIES.
- CHANGE YOUR PRICE.
- BE AWARE OF THE COMPETITION.
- IMPROVE COMMUNITY RELATIONS.
- DON'T NEGLECT CUSTOMER SERVICE.
“If it's still unsold from there, they are likely to liquidate it or in some cases donate it,†Barratt says. “Or sell it to one of these discount stores like T.J. Maxx or Marshalls.†But brands can be sensitive about their products ending up in outlets or in resale shops.
There are companies known as closeout liquidation companies that purchase this inventory from the big retailers and sell them to small business owners and stores at wholesale prices.
Here's how you can remove inventory using either method: On the “Manage Inventory†page, select the relevant items. Select the “Action†drop-down list and pick the “Create Removal Order.†On the “Recommended Removal report,†choose the “Begin Removal Process†option.
How to Turn Dead Stock Into Sales
- Offer customers a free gift.
- Bundle products.
- Clearance sales.
- Return items to a supplier.
- Donate dead stock items.
- Seek out partnership opportunities.
- Sell items on marketplaces.
- Refresh or re-merchandise.
For me, thredUP is a once a year treat for a vacation, special event, or because I hate all my clothes. Their prices are higher than Goodwill (which is pretty expensive itself nowadays) but 1000% worth it for the quality and ease of use. That's why I so highly recommend it.
How to Solve Out-of-Stocks (While Reducing Inventory)
- Prevent out-of-stocks with accurate forecasting.
- Identify and fix broken assortment.
- Optimize unbalanced allocation.
- Automate your replenishment with AI.
- Optimize your safety stock.
- Be proactive about inter-store transfers.
- Use pricing as lever to sculpt demand.
In case when you don't have enough stock to sell it to wholesales liquidators, then you can consider selling your old inventory online. Many small businesses sell their excess inventory to third-party websites. For example, Amazon and eBay are great online channels to reach many potential consumers.
Shop by Marketplaces
- Target Auctions Liquidation.
- Walmart Liquidation Auctions.
- B-Stock Supply.
- Amazon Liquidation Auctions.
