Inevitably, every retailer has faced this classic dilemma: you bought too much stock of an item, a new model came out for merchandise you still have a significant amount of, you didn’t sell your entire holiday inventory, or maybe a product just isn’t moving as quickly as you’d like.
Matt Konkle, President of Fifth Gear, an ecommerce order fulfillment service provider, says, “Non-moving inventory stresses both retailers’ operations and budgets because it ties up both precious warehouse space and capital that can be used for other products or business expansion.”
So what is a retailer to do when products stop flying off the shelves? Liquidate – or eliminate – the inventory!
“A merchant’s best option is often to liquidate the items and move on because at the end of the day, turning a smaller profit on slow-moving inventory is better than losing money while it takes up space and bottom line,” says Konkle.
If you’re facing this classic inventory problem, here are some tips on liquidating your inventory quickly, but without losing too much profit.
The most obvious answer to quickly sell a product is to reduce the price to entice bargain-hunters. According to Kathryn Hawkins, a principal at Eucalypt Media, a content marketing agency, “Depending on your profit margins, you may want to discount your products by anywhere from 25 to 75 percent.”
Hold a promotion
If you don’t want to reduce the price too much (or possibly at all) creating a promotion like a BOGO deal can make a product look more attractive. You can also giveaway excess merchandise as an incentive to buy other items. For example, get a free tote bag when you spend $50 or more! Get creative and advertise the promotion on your website and social media pages to bring in more customers without blowing the bank on marketing.
Establish a “Product of the Month”
If you sell a lot of seasonal inventory, you might face slow-moving inventory often. To move merchandise quickly, set up a display at the front of your store for the “Product of the Month” and offer a special discount with its purchase.
Barry Eichner, of Barry Eichner Consulting a boutique marketing consulting firm, suggests create a “Vendor of the Month” feature to move slow-moving products. He says, “You can also create a “Vendor of the Month” and offer a stacked discount on selected products. I love a stacked discount when trying to clear the shelves. For example, buy 2 products save 15%; buy 3 products save 25%.”
Even if you don’t utilize online retailing, you can use third party sites like eBay or Amazon to sell excess inventory. If you do normally sell online, offer a special online only deal or free shipping on items you’d like to get rid of.
Update your display
According to Hawkins, “Smart shoppers have become trained to flock to the clearance racks at the back of the store, so be sure to build a large display to showcase all of your discounted merchandise.” You can also include sales bins throughout the store and near checkout to attract more impulse shoppers.
Sell to a liquidation firm
If you’re looking to get rid of a lot of merchandise quickly and without much effort, consider selling to a liquidation company. This option will most likely be the biggest loss to your profits, but it may be your best bet when you need to get cash immediately.
Donate excess inventory
Giving away excess inventory to a local shelter can bring several benefits to your business. Though you won’t gain profit, you’ll increase your brand’s awareness, help your community, bring in socially responsible employees, and qualify for a tax deduction.
Each of these strategies can help you liquidate excess inventory, but remember to try to preempt the problem by researching items thoroughly and making realistic inventory purchases. Have other tips to help move inventory quickly? Leave us a comment here or on our Facebook, Twitter, or LinkedIn!
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