Ahh January. The start of a new year and fresh beginnings – unless you’re in the retail business. January can be quite a problematic month for retailers. Retailers must face the inevitable – the wrath of returns.
All those unflattering sweaters from Aunt Irma that no one wanted are soon to be returned and your retail store is back to square one. Economic uncertainty and lowered consumer discretionary spending have prompted a serious spike in returns. In fact, according to a report done by Salesforce, it is predicted that over 1.4 billion orders purchased this past holiday season will be returned – that’s 57 percent higher than in 2021.
Before retailers start to wallow in the post-holiday blues, Net Trade is here to spread some cheer with tips and strategies to help your company salvage the value of its surplus inventory and turn it into a positive.
The first step retailers should try is to return the surplus inventory to the manufacturer or distributor. In some cases, returning the inventory to the manufacturer or distributor may be part of the purchase negotiation. It may be part of the negotiation for new orders and other times the decisions are more unilateral. If this strategy isn’t viable, there are plenty of other solutions available.
Discount, Discount, Discount
Everyone loves a good bargain. Consider finding a discount retailer who can relieve you of your “returns” inventory to make way for the next wave of inventory. In some cases, companies who buy back inventory will resell them to discount retailers to maintain or salvage some of the value of their idle inventory. As the world remains in a time of economic uncertainty, consumers may be more inclined to make purchases when the merchandise is discounted.
Barter the Blues Away
Barter is an excellent way to trade that surplus inventory for assets your company will actually use. When struggling to move unwanted inventory, barter can help companies quickly and efficiently sell their surplus assets, while maintaining the maximum value of those assets, protecting their brand distribution and in-line product. This reduces the chances of companies needing a credit line to help unload their inventory and extend companies’ overall ad budget.
The Season of Donation
If discounts or bartering doesn’t appeal, donating surplus inventory is always a viable solution. Donations can be a cost-effective solution to clear up warehouse space quickly. If your inventory is suitable for a charity, consider donation as an option. With tax season in full swing, your company’s donation may come with tax benefits. If the inventory is not donation-friendly, consider gifting or providing samples of the inventory to reward loyal customers and clients with inventory in the form of gifts and samples. Not only are you showing your appreciation, but it is also a thoughtful way to build and maintain customer loyalty. Especially in times of economic uncertainty, your gifts or samples may have the power in the long run to drive future sales.
Regardless of which option a company chooses, it’s important to act quickly when dealing with surplus inventory. The longer it sits in storage, the more it will cost the company in terms of storage fees and lost opportunities to generate revenue. By taking action and finding a solution for excess inventory, businesses can turn a potential problem into a positive outcome.
If the wrath of the returns is harsher than expected, then call Net Trade! Reach out to us today to learn how we can help relieve your company of surplus inventory and keep your business moving forward in the new year.