For all the online retailers, excess inventory can be a massive issue. It’s mainly because when this inventory is left unsold, it will keep accruing the carrying cost.
This can be a costly proposition because experts say that the carrying cost is around 20% to 30% of the entire inventory cost of a business. Having excess inventory is also bad for the cash flow.
It’s mainly because excess inventory can lessen the profit margins, increase the inventory cost, can cause overstocking, and will lead to dead stock. But there are several methods through which you can easily terminate the excess inventory. These are:
Keep track of your inventory
Staying well-updated about which products are selling and which are not can help you eliminate the excess inventory. When certain products do not sell properly, they reach the end of their respective life cycle and have no value.
The best way you can prevent such issues from happening is by keeping track of all the products within your inventory. Experts have provided evidence that around 36% of businesses track their excess inventory against their ESG objectives.
You can remove all those products from the inventory that do not sell properly and replace or increase the quantity of all those products that customers are interested in purchasing. This can also prevent all the products from getting dumped in the landfill.
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Provide the products as a gift
You can provide excess inventory through free gifts to your customers. This technique certainly works with all the merchandise that is less expensive.
For instance: when you have a full-price item, which is pretty difficult to sell, you can utilize it as a giveaway to all the incentivized shoppers so that they can register for the mailing list. Otherwise, the shoppers can increase their shopper card value, and by doing so, they can obtain $80 worth of free products.
Even though this technique might not generate plenty of revenue, it will surely magnify customer satisfaction and also reduce the stock levels in the warehouse.
Recycle your excess inventory
Instead of dumping all the products from the inventory in the landfill, you can check them out and see whether or not they can be recycled. The majority of the municipalities have recycling programs. Otherwise, you can look for businesses that are known to take recyclable goods.
You will certainly find a company or someone within your location who is an expert in taking care of obsolete inventory recycling. They also have the skills to load up all the extra products and look for the right home or an alternative option to put them to proper use.
Liquidate the excess inventory
Once you get to liquidate the excess inventory, you will certainly get the chance to eliminate it completely. In some situations, it might be the best option for business and yourself. The inventory liquidator will purchase all the excess products at a good price.
But remember one thing, these companies do have a habit of “CHERRY PICK” products and will try to buy them from the inventory at a much lower price. Although you might get any profits through liquidation, you will certainly free up capital and space.
Excess inventory is certainly not a great thing for all the online retailers out there. They will not just end up at the landfill but will also take up way too much space in the inventory. That’s why eliminating the excess inventory will certainly help you greatly.