If you have items in your inventory that have stopped selling or are moving too slowly to be profitable, there are other parts inventory control options to consider before discarding that stock.
When waiting for your inventory to clear out on its own is not an option, the following suggestions can be useful:
Rebalance Inventory Between Locations
If you have multiple inventories spread across different geographic regions, redistributing stock from locations that have too much inventory to those that have too little can be a viable solution. If Warehouse A isn’t getting any orders for that inventory item, it makes sense to send that inventory item to Warehouse B, where they are still receiving orders for that item. Warehouse B will only make the issue worse if they purchase stock from a supplier when another location has that stock freely available.
When deciding which slow moving stock items should be transferred, those with the highest market value should take precedence because they are tying up the most capital.
Reduce the Price
This can be done as a special for buying in bulk. Inducing customers to buy more at a reduced price is a good way to quickly get inventory off your hands and reduce the shipping cost per item.
If this isn’t possible, a price reduction might be enough of an incentive for bargain hunters.
Work with Another Company
If your excess inventory is raw materials or items in common use, there may be other companies that have a need for that inventory. If so, you could sell it to them at a price lower than they could get it from their supplier. If they also have an excess of inventory and they are items that you could use, you could barter with the company and figure out a way to exchange goods in a mutually beneficial manner.
Convert The Slow Moving Item Into a Different Product
Sometimes this can be done through repackaging. For some products, combining another item or items into a “kit” with other complementary items makes the purchase more worthwhile to customers.
For example, if you are an outdoors store and the slow moving item is a hunting knife, try packaging it together with cordage, waterproof matches, a compass, and water purification tablets. That collection could be called a survival kit and may increase sales. If you are sell snack foods, then you could create gift baskets. Commonly used parts in popular products can be sold as repair kits.
Sell Excess Inventory Online
There are plenty of online marketplaces that specialize in selling surplus inventory. Many of these are niche specific. There’s no need to expend time and money creating your own website and building up traffic because sites already exist that are frequented by thousands of buyers looking for good bargains.
Making use of these suggestions, especially rebalancing your inventory, is difficult to accomplish without accurate and detailed information. Without the right information, there is a high risk of making wrong and costly decisions.
A good way to get accurate and detailed information is with an enterprise resource planning (ERP) system. If you don’t already have an ERP system and would like to discuss getting one, or if you do have one and have questions about it, please contact Acumen Information Systems for more information.
