Most successful businesses know how to manage their inventory. All businesses need to ensure that they don’t run into inventory problems to maintain their profitability. Inventory management is one of the aspects of the operation that needs constant attention. That way problems such as excess and slow moving inventory can be avoided.
More often than not inventory problems occur during the beginning of the year and the end of every season. That’s when demand for new products increases, and old or aging stocks may be less in demand. Instead of keeping the items on hand in the hopes of someone wanting to buy them, it is recommended to find ways to clear excess inventory.
Excess inventory occupies space that the business can use for new items. They add to the cost of warehouse or shelf space while collecting dust. Excess and slow moving inventory affect every retail business.
Even when proper research on the target market has been carried out, problems can still appear out of nowhere. When inventory problems arise, it is important not to be stressed by them. Below are five ways that will help convert slow-moving and excess inventory into cash.
Have a Clearance Sale
When facing overstock, the first thing you need to do is to have a clearance sale. Clearance sales can actually become part of a regular part of your sales strategy. A 10 percent discount will allow you to start moving some excess inventory, but if you want to get rid of old stock faster, offer 35 percent to 70 percent discount.
For a B2B company, cash flow is an important element of the business. It is considered as the life-blood of the company. Selling at a loss or at a low-profit margin is better than keeping it on the shelf for a long time. Slow moving inventory is something that is left unsold within 90 to 120 days, and the business should get rid of them as soon as possible. The discount rates should be adjusted based on how fast you want to sell the stock. For items that are in storage for more than 120, a 70 percent discount might make people buy them right away.
Showcase Any Products to be Sold Fast
Overstock problems happen when new products are added to inventory. Most businesses highlight the new products on their catalogues and website. By hiding older stocks, they have no chance of being sold. Brands should consider showcasing the older products alongside the new ones, albeit in a less visible fashion. That way overstocks too have a chance of selling! Always keep in mind that excess inventory costs money.
One way to showcase old stocks is to have a dedicated section in your store or website for products that you want to sell fast. For instance, you can have a “Bargain Corner” that will show out-of-season items. This is one way to highlight your unsold products without having to place them on top of the shelves. Keep in mind that product placement can also improve sales.
Organise a Flash Sale
Another way to convert excess inventory into cash is to organise flash sales. By offering discounted items for a limited time period is a good way to increase sales. Flash sales create a sense of urgency that makes consumers want to buy the product. It is a great way to improve the business’ profitability, and solve overstock problems.
Flash sales can be exclusive and accessible only to a group of loyal customers. You can use your current customer database to send out personnalised emails to promote your flash sale. It is important to send out the emails a couple of days before the actual sale date. You can also use social media to promote the flash sale and create a sense of urgency among consumers.
Create a Regular Sales Routine to Promote Return Business
You should have a regular sales routine in order to sell your slow moving inventory more easily. Bargain hunters are always on the lookout for great deals, and having a sales routine will bring them to your stores on a regular basis. Excess inventory items can be offered at discounted prices during such sales.
During these regular sales, you don’t need to greatly reduce your margins. You should leave that when you conduct clearance sales. By sticking to a schedule, return customers will know when to expect sales from you and thus plan visits to your store accordingly. They will return to your shop or website during sales even without having received prior announcements.
Organise a Private Sale on stokkly
Another method to convert excess inventory into cash is through private sales. And the best way to organise private sales is on stokkly! The online platform has been designed to provide brands, manufacturers and distributors with a simple and convenient solution to manage their excess inventory.
Through stokkly, businesses can contact customers who will be part of private sales. The platform brings buyers looking for excess inventory and business with unsold goods together. Private sales allow businesses to get rid of their slow moving inventory while at the same time maintaining attractive margins.
In addition, you can apply all of the above mentioned methods and optimise your profitability through stokkly. Aside from private sales, you can also create recurring promotional events and flash sales with the help of stokkly.
Businesses can target certain groups of buyers and offer the buyers products that they will find interesting. This ensures that overstock and excess inventory perform better. stokkly provides a flexible, interesting and comprehensive approach in converting excess inventory into cash.