Excess inventory is a real problem for many businesses. There are many reasons for a business having excess inventory:
- Forecast demand incorrectly
- Poor weather impacted sales
- Cancelled order from large customer
- Technical issues impacting website sales
- More returns than expected
- Making room for new product launches
The Problem with Excess Inventory
As a business, in order to maximise sales, you'd need to hold more stock than necessary to ensure that you're not out of stock and that customers can buy on demand. This, though, brings with it cash flow problems. Having too much stock means that a business will have over purchased stock, costing them more money than required. Therefore, selling excess stock is essential for releasing cash tied up in stock.
Stock with a shelf life, like food and drink or some beauty products, have a time sensitive issue. These products see their value dropping day by day until they are near worthless when they hit their expiry dates.
With costs of warehousing increasing to record levels, even the biggest businesses in the World have to deal with excess stock quickly to ensure stock isn't left on warehouse shelves or capital isn't tied up for extended periods. Even brands like Apple have excess stock, especially when they launch their latest products, that they need to sell quickly in order to focus their sales on the new products.
Making sure you know how to sell unwanted inventory is imperative to reduce cash flow problems.
But how do you sell excess stock quickly?
1. E-commerce Flash Sale
For those businesses that have their own website or maybe sell via Amazon, Flash sales are a quick and easy way to sell surplus stock quickly. Flash sales are limited time and/or limited stock offers that encourage your customers to buy stock quickly and to take advantage of bulk discounts. For this to be successful, you'd need to engage, simultaneously, with social media followers, email subscribers and SMS subscribers to bring in the maximum amount of traffic for the offer.
2. Liquidation Store
Whether buying the stock outright or enabling brands to list their stock on the platform with drop-shipping options, liquidation.store is the perfect solution to selling excess inventory quickly. Providing offers on excess stock, all that business have to do is fill in this form, providing details of your stock and the customer service team will respond quickly.
3. Bulk Discounts
For those businesses that sell to other businesses or sell via wholesalers, running bulk promotions to encourage larger order quantities is a great way to clear excess inventory. Offers like buy one get one free or buy two get one free encourage customers to buy more stock than they usually would. If you have up to date Customer Relationship Management (CRM) software, you can email, call, text customers to let them know about such offers to increase pull through.
4. Liquidation Wholesalers
Liquidation Wholesalers buy up excess stock and liquidation stock from a whole host of businesses. No matter how unique your product, there will be a wholesaler to purchase your product. The only downside is that the more unique/obscure your product, the lower the likely offer on your product will be.
Typical, liquidation prices are 5-20% of the retail value of your product but this enables businesses to sell excess inventory quickly.
Your best bet is to shop around to get the best liquidation offer. There are many liquidation wholesalers that specialise in different industries. Make sure that you find the best liquidation wholesaler for you.
Using third party marketplaces is a quick way to sell excess inventory but you need to be an established seller with an established product to these platforms in order to sell efficiently.
If your product isn't already on Amazon, with a strong sales velocity and 4 star rating, you'll sell very little regardless of the discount offered. Amazon doesn't work well with one off batches due to the Amazon Algorithm. Ebay is similar with customers trusting selling reviews to ensure that they are going to get the product in question.
If you are established on these platforms, creating a discount or offer is easy and, if sales are already good, can enable you to sell excess stock quickly.
In conclusion, to sell excess inventory first of all use your own sales channels effectively first. Whether you're a D2C or B2B brand, offering discounts and bulk offers to existing customers is a quick and easy way of selling through stock.
After that, liquidation wholesalers and third party platforms are a relatively easy and cost effective solution to sell through any residual stock.