One of the best ways to get rid of your company’s excess inventory is through resale. Resale can be a key to saving the value of your surplus merchandise, but it does come with some challenges and hidden costs that one should be aware of before implementing their resale strategies. Never fear, Net Trade has several resale protection tips for protecting the value of your excess inventory.
Assess the Size and Demand of Your Inventory
One of the most common predicaments companies experience is the storage of surplus inventory. It is one of the most immediate and visible impacts of surplus inventory due to the cost of storage space. If inventory is slow moving, it takes up valuable warehouse space. Make sure to determine the number of pallets, cases per pallet, case weight and case pack. Know how much space you are using and the cost per pallet for storage and any in/out charges.
Not only are you losing money on paying for the storage space itself, but the process of expediting the sale of excess inventory requires a great deal of time, energy and expenses. You won’t see a return on your investment until the excess inventory is sold. Check the general demand for your products. For example, in the current market place big bulky items such as furniture is moving very slowly. Get a general market update.
Demand for a slow moving item is weak by definition. Dropping the price does not necessarily improve demand,
Beware of the Cherry-Picking Liquidator
A quick way to sell excess inventory is by working with merchandise liquidators. Merchandise liquidators purchase your overstock at a discount and resell it, sometimes for a commission. This can be a great way to keep your inventory moving, but there are some pitfalls to be aware of.
If this is your first time working with a liquidator or if it’s a new liquidator you’re working with, ask for references and call the references. Keep your prices realistic, remember slow moving demand is weak by definition.
In some cases, liquidators will cherry-pick the best products out of your inventory, instead of purchasing the entire stock. If you are trying to unload your entire inventory, this may not be the best route for resale. In these instances, you could have a great deal of difficulty selling the remaining inventory. Selling excess inventory on eCommerce marketplaces, like amazon or eBay, can be another great way to resell your merchandise. Keep in mind, it may be a longer process when considering the time it takes to photograph, market and create pages to sell your merchandise according to each eCommerce sites’ rules and expenses that come with reselling on these platforms. Please keep in mind the cost of fulfillment and that includes the sales tax collection, returns etc.
Nobody Wants a Rotten Apple
If your surplus inventory consists of perishable products, keep a close watch on expiration dates before the products become obsolete. Perishable items cannot be used for “giveaways” or in some cases, cannot be discounted for health and safety reasons. If your perishable inventory goes bad, you lose value on the entire inventory and end up writing it off as a loss. It is critical to monitor perishable inventory to ensure you always have the right amount of inventory to meet the demand.
Make Sure the Price is Right
In today’s economy, consumers love a good deal. Promotions or discounts can be effective tactics when reselling excess inventory. Monitor the demand for the inventory and how competitors are pricing similar products.
Watch the pricing carefully as the link between price and demand is more in-elastic with a closeout than you would find for in-line items.
Transparency is Key
Never underestimate the power of transparency! If you are planning on discounting or holding a major sale of your excess inventory, be honest with consumers on why the merchandise is on sale. It can be a great way to combat any hesitations consumers may have about purchasing the discounted products. In today’s climate, people are mindful of what they are spending money on. Consumers appreciate transparency about what they are purchasing and it may even be a way to build customer loyalty.
Excess inventory continues to be a recurring issue that many companies face. Having proper inventory management systems in place can help ensure you have the right amount of inventory at the right time. If a situation ever arises, Net Trade will always have your back and help you find the best strategy to rid your excess inventory and keep your business propelling forward.