Effective surplus stock management is a small business owner’s most critical (and complex) responsibility. A fine line must be drawn when managing inventory. As shown by the fact that businesses with low inventories and high turnover outperform those with high inventories and poor turnover, effectively managing inventory is one of the crucial ways to small business success.
It’s worrying when you have a sudden surplus and cannot sell it. As a result, guidance is created to assist you in managing extra inventory so that it doesn’t harm your company’s finances.
What Is Surplus Stock?
It has been on the shelf or in the warehouse for so long that you no longer anticipate sell surplus stock. The term “deadstock” is frequently used, and corporate owners will remove it from the company’s books.
The problem of excess inventory typically arises when you have more merchandise than there is demand for. You would therefore be left with a large quantity of stuff you had paid for that no one would buy. Additionally, you have to pay for storage, which inhibits you from substituting new, higher-demand goods for the excess. Loss of revenue is frequently the result of having too much inventory.
Why Might You Possibly Have Too Much Stock?
Several factors, both under your control and outside of it, could result in you having too much inventory. These are some of the most prevalent factors that you can influence:
- Not predicting anticipated demand and sales: You’ll have too much of a specific product if you overestimate the market’s need.
- Overreacting to modification requests: Fads and trends emerge, which may surge product demand. However, doubling or tripling your regular production order in response to these demand swings might cause a significant issue when the craze passes.
- Lowering quality to satisfy demand To satisfy rising demand, you might produce inferior goods if you speed up the production process. You might observe more canceled or returned orders as a result. What’s worse than too much stock? Surplus stock that is too poor in quality to be sold anyplace.
- Business reversals: Your company may end up with an excess inventory of one product if you decide to concentrate on selling one product more aggressively. That’s okay if you have a strategy to dispose of the extra stock.
- Shoddy inventory control system An inventory management system includes transactions, product orders and purchases, and sales processing. Errors could result from a lack of cooperation between the operations, purchasing, and sales teams. When your tracking system is inadequate, you risk ordering too much of a particular product.
- Economic fluctuations: People’s needs and demands might rapidly shift when the market declines, such as during the 2008 financial crisis or the coronavirus epidemic. Unless you sell anything necessary, disposable income runs out, and you might find that you can’t sell nearly as much merchandise as you require.
- Weather variations: Before a hurricane or snowstorm, individuals stock up on a few essential things and cut up on other purchases. Extreme weather leads to extreme demand. Therefore your products may not be as famous for a week, a month, or longer.
6 Methods To Sell Surplus Stock
There are numerous ways to end up with too much inventory. When that occurs, it’s critical to figure out a strategy to eliminate it to keep it from adding unnecessary weight to your company. Here Some of the strategies follows:
1. Sell Online
First and foremost, having surplus inventory is a terrific incentive to open an online store if you aren’t already selling your goods there. Think about setting up a branded store on GoDaddy’s Online Store or Etsy so you can handle sales quickly. Alternatively, you can favor selling your goods on online stores like Amazon or eBay.Any of these platforms make it easy to create an account, and you can use it to sell your extra merchandise for a profit.
2. Offer Sales
Nobody mandates that you inform clients that you are discounting certain things since buyers are just not purchasing them. You can draw in new clients and sell your overstock merchandise at fair pricing by offering significant discounts. Even though your margins will be smaller, it will still be better than leaving unsold goods on the shelf.
However, you want to approach sales with a strategic mindset. Don’t hold a sale solely to offload your surplus stock of a single item. Use originality in your marketing communications. Regularly providing discounts is an excellent approach to keep customers coming in and purchasing inventory in danger of going out of season or reaching the end of its product life cycle. This tactic might not be practical for costly goods with small margins, but it’s a decent approach to guarantee you get something for inventory that could depreciate significantly.
3. Bulk Discounts
You get a volume discount when purchasing goods in bulk. Why not make the same offer to your clients? Encourage clients to purchase multiple pieces at a discount if they have a severe surplus inventory issue. Bulk discounts may entice customers to make larger purchases than intended, reducing your excess inventory.
4. Increase The Exposure Of Products
Although this is primarily a retail business technique, you might be able to use it even if you don’t own a store. Christine Guillot, a retail specialist, advises double- or triple-exposing your goods. She claims that displaying the same item across your store increases the likelihood that a customer will notice it.
By using retail analytics, you may learn how customers typically move through your store, allowing you to display overstock items in several busy places. Making sure people can’t ignore something will help you sell more of it sometimes.
5. Product Bundling
If a particular item isn’t selling, consider putting it next to a hot seller. Research by Software Advice found that 90% of retailers utilize bundling to increase sales of a particular product.
If you can, combine related things in your store and sell them for a bit less than you would if you were to sell them alone. In this manner, you can market things that sell slowly without suffering a loss in revenue.
However, you are not required to combine your extra inventory with associated products. Sometimes all it takes to convince someone to buy something is to point out a deal. You might get a few bites by upselling a sluggish item at a reduced price to customers already making a purchase.
6. Remarketing
It’s time to review your marketing plan if nothing appears to be working. Consider some of the following advice whether you’re selling offline or online:
- In product titles and descriptions, use new keywords.
- Take fresh photos of people utilizing your goods or utilizing them in various settings.
- The product’s location in your store or online should be changed.
If making these adjustments helps you eliminate your extra inventory, you might want to think about changing your marketing approach to establish a new, unified brand.
Conclusion
Inventory surpluses do occur. At some point, almost every organization will have to deal with it and figure out how to get rid of it without suffering a financial setback. Just keeping it becomes a burden on your company.
You ought to use creativity and strategy when attempting to market that inventory to customers. But in the end, if you can’t sell it, there are still helpful ways to use it.
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