Surplus Inventory is described as a situation where fewer supplies are used than what is stocked. It could be as a result of a customer canceling orders or a vendor offering a discount by increasing the quantity supplied. This can create cash-trap locked up in stock thereby affecting your profit margin. Also, having excess stock takes up valuable space in your store and storage, and stale products could negatively affect conversion in-store. Is extra stock weighing you down (especially in the wake of the ongoing pandemic)? In this article, we take a look at 4 strategies to liquidate surplus inventory.
When you have a slow-moving product, the problem may necessarily not be the product itself, it may be a result of poor marketing. This can be resolved by incorporating some minor changes, or by using great marketing practices like rearranging the product layouts in your store or switching shelf arrangement of the product. Sometimes, just placing the products in a more obvious place does the trick e.g displaying items towards the front of your store. You can display products alongside trending items to improve sales. This gives customers a new perception of the product. When these merchandising tactics don’t work, you can consider slashing your prices.
Clarence sales is an old fashioned way to liquidate surplus inventory. They are amongst the best techniques for getting rid of stocked products fast. Offer items at discounted prices starting at probably 20%, then gradually moving up to 50%, then 70% or more depending on your profit margin. The idea is to offer deals customers can’t ignore. You can introduce bulk sales that require customers to buy a certain amount of product to get one free or get another complimentary product. It is smart to bulk sell items that people are likely to stock up on like clothes, popular food items accessories, etc. You can also consider having bulk item sales around holidays when customers purchase multiple items for gifting purposes. Having clearance sales help you clear off redundant stock whilst earning a decent profit without necessarily affecting the business.
This is a common technique that has worked for merchants over time. It involves grouping certain products together and selling them for a slightly lower price than if bought separately. For example, popular items can be bundled with less popular items to entice shoppers to select the bundle over a single item. You can also bundle complementary items by adding value to both items and selling them quickly. Bundling, in a nutshell, allows you to sell merchandise without taking a huge profit hit.
This is another tactic that works best for low-cost items. If it is too hard to sell as a giveaway or incentive, you can offer a “free” product when customers purchase over a certain amount, say N2000 or N5,000. This encourages shoppers to stock up on regularly priced items, and spend a little more than usual to receive an exclusive gift. You can also use it as an incentive for signing up for your mailing list. This offloads your unwanted inventory, whilst increasing your average sales totals.
Note: When implementing this, be sure to grab shoppers’ attention by placing a sign outside your door or by the gift box. This will help in improving foot traffic.
Other ways to liquidate surplus inventory includes; via Social Media Platforms like Facebook and Instagram, Sales for Employees, and Charitable Donations.
Although it is advisable to keep your inventories lean as a way to minimize inventory surplus, the strategies presented above will help you liquidate your inventory should you overstock. While ordering the right amount of product at the right time can be tasking, ICG software solution can manage this efficiently with the up to date data it provides you on your inventory and sales processes. Contact us at pos@posshop-ng.com for inquiries.