With the lull of the spring season, excess inventory stock can be an issue for retailers. Many businesses will wait to see if excess items will sell to justify their investments. But every day that that old inventory sits unsold, you lose money.
Below are 14 strategies you can use to clear old stock.
If you're wondering how to clear old stock, the strategies listed below will help you achieve this in a short amount of time.
14 effective ways to clear old stock
1. Plan ahead
Ways to help overcome excess inventory stock in the first place is to start tracking your past sales.
Look at the sales volume by month and think about special events or holidays that may correlate with major dips and peaks.
It may be time to think about an inventory management system that allows you to have access to analytical tools that can give you a snapshot of historical trends, in turn, helping you to make better inventory stock ordering decisions for the future.
2. Understand your inventory stock through different channels
People tend to shop differently in different places and this can affect stock levels. If a particular product is performing well in one sales channel but not the other, consider moving inventory stock to the better performing sales channel.
3. Automate the ordering process
Inventory management systems are important to the business as they enable accuracy and speed up business processes.
For example, when inventory stock moves faster than expected, a good inventory management system can create a low inventory stock alert, allowing you to order quickly from suppliers.
This can be more reliable than manually ordering inventory stock and using a spreadsheet. This outdated method can result in human error where it may be easy to overlook an item. It doesn't help your business understand how a particular product is trending.
4. Optimise warehouse space
Taking advantage of warehouse space is a largely overlooked part of inventory management procedure.
Organising shelf space can make it easier to find specific items, create room for more stock, and ensure products don't get damaged.
5. Bundling
If a product is not selling on its own, try pairing it with a big seller item that is related.
Bundling can be attractive to shoppers because they perceive to be getting a good deal, as long as it is attractively priced.
6. Offer discounts
Before merely discounting overstock inventory, think about smarter ways to discount. Try offering discounts to current customers, or as a reward to them who successfully refer a friend to purchase an item.
Other ways are to offer discounts only to new customers on the first item they purchase, but keep everything else full price.
Clearing old stock can be done in a number of ways, from auctioning it off to throwing a storewide sale.
7. Provide free shipping
Free shipping can often determine whether a person purchases from you or not. If you have an online store, try running a free shipping promotion on a specific group of products that you are trying to get rid of, and watch the results closely.
Excess inventory stock can negatively impact your bottom line. It is crucial to be aware of what is selling and what is not.
These findings will help you form an effective strategy to eliminate that old inventory from your stock shelves and more importantly, ways to effectively manage stock so excess inventory stock is reduced in the first place.
8. Return or trade excess product
With raw and untouched materials, suppliers may be able to offer a refund, discount, or credit for product returns.
If this is the case, your business will bear the weight of shipping and handling, but you will no longer have capital tied up in excess stock and can instead invest in usable materials.
Alternatively, if you can’t return your excess, consider trading it within the industry. Other manufacturing companies may be able to put excess stock to good use, and this will build relationships between companies.
9. Find new uses for materials
While you may not need materials for the product they were originally intended for, your business may be able to use the excess stock for other production lines.
While the excess product may need reworking to become appropriate for the new production line, it is still worthwhile finding other uses for stock that will otherwise go to waste.
10. Liquidate excess stock
In cases where your business cannot find other uses for excess product, liquidation may be the best option. In this type of agreement, a liquidator will buy your excess stock at a negotiated price. It won’t increase your profits, but it will deal with stock that is otherwise redundant.
11. Think environmentally
As customers grow more environmentally conscientious, businesses that clear excess inventory in an environmentally friendly way are more likely to retain good customer relations.
While some items cannot be put to better use and need to be scrapped, other products can be recycled. Instead of disposing unneeded items, recycling is a much more sustainable option for businesses concerned with their environmental impact.
Similarly, if stock is of use to others outside of the manufacturing industry, offering excess as donations to not-for-profit organisations is a conscientious way of reducing redundant materials.
12. Sell it at an auction
There are copious online platforms where goods can be sold. You can either try to sell the excess inventory as-is or you can market some of the raw materials if that is more desirable.
Bear in mind that this is can be a time-consuming process. Taking photos, uploading information, monitoring auctions and getting the goods delivered will take time.
Additionally, not all goods will sell at auction.
However, it is worth a shot if you’re aiming to get rid of as much inventory as possible.
13. Donate your excess inventory
If you are really having difficulty selling your excess inventory, a different option is to donate it. By donating your inventory to non-profit organisations you can help others who made need these resources but cannot afford it.
Depending on where your company is located, there are often tax credits for these kinds of donations.
14. Repurpose the stock
Some stock can be difficult to move, even after a discount. That’s not to say that the stock is devoid of value. The best use for some inventory may not actually involve selling it.
Some inventory may be able to repurposed for internal use, like as a business supply or as a reward for staff.
Other inventory may be able to used for promotional purposes or as rewards in a loyalty program. Remember, the appeal of a freebie may have a stronger pull in some cases than a discount on the sale price.
The advantage of offering free gifts or rewards is that it can attract customers while not ‘cheapening’ the image of your products in the same way that discount prices might.
