Tips for Retailers Looking to Clear Excess Stock
Are you often left with excess stock at the end of a season, holiday or special event? Perhaps you’ve ordered too much, or the product hasn’t been as successful as expected. If the answer is yes, then you’re not alone. Retailers in the US are sitting on a staggering $740 billion worth of unsold and excess stock. While there are advantages to having plenty of stock, too much can mean you don’t have enough space to store other items, and can lead to potential cash flow problems. If you have too much stock, here we share some tips for clearing excess inventory.
Hold a sale to clear surplus inventory
One of the most effective ways to clear excess stock is by holding a sale and selling the stock at a discounted price. With inflation causing prices to spike, many consumers are increasingly looking for discounted alternatives, which could help you clear your surplus stock even quicker.
To create a sense of urgency among your customers, try marketing it as a flash sale or even offer “buy one, get one free” deals. This strategy may help you get rid of your excess stock quickly, though you may lose out on some potential profit. However, with the high cost of warehousing and not being able to store fresh stock because you have too much outdated or surplus stock, selling old stock at a slight loss can make good business sense.
Sell to a liquidation company
Liquidation companies buy excess stock from retailers at a reduced price. These businesses will usually be specific about the types of items they will buy and at what price. Selling to a liquidation company can offer a fast and effective way to eliminate old stock and free up storage space. However, you may find that the price you are offered for your inventory is much lower than you anticipated, and you may face making a loss. Before you decide on this route, research local liquidation companies to compare prices. You may find a deal where you make a small loss, which is offset by the benefits of freeing up space to hold more profitable stock.
Position it next to bestselling items
A simple yet effective strategy to reduce your excess stock is to put it alongside your bestsellers. Whether on your website or in a physical store, positioning old stock next to popular items that get looked at more often may tempt your customers to add some of the old stock to their purchases.
Utilize a business credit card
While a business credit card for retailers can’t directly clear your excess stock, it can provide valuable financial flexibility. This flexibility can help you manage your cash flow when you find yourself with too much stock on your hands. You can use a business credit card to cover any necessary expenditures related to clearing out your unwanted stock, such as marketing, packaging, or shipping. With a business credit card, you will also have an accessible line of credit to help you bridge the gap while you work on selling off your inventory.
“By using a business credit card responsibly and closely monitoring business expenses, retailers can make more informed purchasing decisions and avoid accumulating excessive stock. Our reporting and accounting integrations help business owners manage their stock positions.”
Create product bundles
A way to shift several items at once is to group and sell your excess stock in bundles. While this may impact your profit margins on some lines, it means you can get rid of items much quicker and make more space in your warehouse or stockroom. Look to place items together that your customers frequently buy together to create attractive offers. You can even create a bit of excitement around them in your advertising to give them added appeal.
Trade stock with another retailer
If you know of other local retailers who also have unwanted inventory they’re trying to clear, consider swapping stock with them. They might be able to move your old stock and vice versa. You can advertise the items you acquire as new stock, encouraging your customers to buy them at competitive prices. Partnering with complementary businesses can also help you cross-promote your surplus stock. For instance, if you’re a footwear retailer with excess inventory, team up with a clothing store to run a joint promotion that benefits both businesses.
Donate excess stock to charity
If you have excess stock that you want to clear out as soon as possible and are prepared to take a financial loss, consider donating it to a charity. Not only will it create valuable space in your warehouse, but you’ll also be helping a good cause. There’s also the potential to gain publicity or even tax advantages through your charitable activity. This type of PR can be great for your business by improving your brand image and encouraging customers to see you as a community-minded retailer. They may even be willing to pay more for your products as a result.
Review your existing stock management processes
If you have excess inventory, you need to understand why you have so much unwanted stock and then reassess your inventory management processes. It could be due to seasonal variations, changes in customer demand, poor inventory management, or inaccurate forecasting. Once you’ve identified the cause, you can use a combination of historical sales data and demand forecasting to adjust your ordering to avoid overstocking in the future.
Clearing excess stock: Summing up
By optimizing effective stock clearance strategies and combining them with utilizing the benefits of a business credit card, you can increase your chances of cleaning your surplus inventory, avoid overstocking in the future, and more effectively manage your business cash flow.