Most business owners and e-commerce managers need help knowing what to do with excess inventory at some time. You are wasting time and money by keeping all those things stacked up in your storage area when you would better concentrate on the best-selling items for the upcoming season.
But remember that all brick-and-mortar stores and e-commerce businesses occasionally have surplus inventory, so learning to eliminate out-of-date merchandise is crucial to any company. With a few wise decisions, the tension caused by extra inventory will soon be history.
The first step in controlling your surplus stock is to determine its reasons. Once you’ve done this, you’ll be able to prevent future excess accumulation and quickly get your current surplus goods moving off the shelves. This post will provide tips on managing your store’s inventory now and in the future. Unsuccessfully managing your excess might result in rising prices, decreased in-store and online conversion rates, and restricted cash flow.
There has never been a better time to talk about this expanding problem. The estimated value of extra inventories has increased above world norms since the outbreak started. For instance, the Spring/Summer 2023 surplus in the fashion sector was between $160 and $185 billion globally. That is more than double what was anticipated and planned.
Fortunately, several tactics can lessen or even eliminate this widespread issue. Read on to learn everything you need to master inventory controls, from transferring current stock to demand prediction optimization.
Excess Surplus Inventory: Explained.
Surplus inventory is just extra goods. If demand exceeds expectations, some businesses purposefully keep more inventory as a “backup” supply. But extra inventory is typically the result of overstocking because poor demand forecasts occurred.
Ordering a consignment with a bit of excess or surplus goods might be helpful when you’re expecting a seasonal sales uptick. However, persistent overstocking can very soon turn into a significant resource guzzler.
Inventory expenses. Storage costs money and space, and occasionally firms are left with the tab for getting rid of extra inventory. Furthermore, expiration dates present a further issue for companies that offer perishable items.
What Leads to Excess Inventory?
There are several reasons why a company would decide to keep its excess inventory. Inaccurate demand projections occasionally result from human error, but socioeconomic indicators and outside forces can also influence them.
Let’s start by discussing predicting mistakes. Some main contributors to forecasting mistakes include poor forecasting techniques, disregard for seasonality, and a need for more knowledge of the market’s fundamentals. Poor inventory planning is frequently a result of firms needing more necessary tools. Fortunately, many excellent inventory management programs are available today to track, manage, and arrange your inventory and sales orders in one location.
However, as was already said, firms can find themselves with extra inventory due to circumstances that appear entirely out of their control. Every product has a lifetime, and demand for it will inevitably reach a peak and fall off. Similarly, companies with highly complicated supply chains and several locations may need help to centralize their inventory management, leading to a situation where they have significantly more inventory than they can sell. To effectively manage a massive business in such circumstances, it’s crucial to clearly define key roles and duties and use the proper technology.
How to Increase Online Sales by Using Surplus Inventory
We now know that having too much excess inventory is not optimal. Your profit margins are being reduced as it occupies space. But there’s no use focusing on the drawbacks. We’re here to offer practical, uplifting answers that can help your company sell surplus stock and manage inventory. Let’s examine how to exploit our excess inventory to increase online retail sales to turn the situation around.
- Make package deals.
Have you ever seen a tempting package offer when buying online? Did you pay attention to it? Yes, it did. Bundled offers are a terrific way to sell items that might sit around gathering dust. It benefits both parties since your consumers save money, and you move those pricey things. But how do you put together the top package offer available?
The finest package offers to satisfy all parties involved. Combine your older items with alluring new ones to draw in new consumers rather than lumping your current clients with a bunch of deadstock. Try to group goods of the same (or comparable) type. For instance, a gaming package that combines a new game release with a selection of previous titles or a bundle of bath items
- Refine your display and marketing strategies.
A marketing refresh is another excellent strategy to get your stock moving online. It’s crucial to express your incredible deals with some clever marketing methods, regardless of whether you’re hiring a third-party marketer or working with an internal marketing team.
This may entail a successful email marketing campaign to thoughtful product placement on your e-commerce website. Just be sure to place those offers in areas where your clients will find them (and buy them).
- On your website, draw attention to products.
On your website, draw attention to the items you need to move. The important thing is to draw attention to these things in any practical way. You may do this by advertising a sale on your site, emphasizing things as being a “last opportunity to buy,” or making sure they appear towards the top of search results.
You could provide free delivery on these specific items. The most incredible method to get people to notice your surplus inventory online is with a mix of eye-catching design and alluring advertising. Remember that your buyers are unaware that these items are your adversaries.
A well-designed website may move items. Aim for appealing color schemes, excellent photography, and unique, thought-provoking material that sells itself. Changing only the keywords and descriptions can be effective.
- Utilize your digital marketing and social media campaigns.
Social media and content marketing should be noticed. An excellent blog article, tweet, Instagram photo, LinkedIn post, or email can be sufficient to increase those sales.
Of course, you should pay attention to the effectiveness of a traditional email marketing campaign. Your clients will quickly purchase your extra inventory if you have compelling SEO-optimized content, the ideal offer, and a strong CTA.
Solo Stove is one business that has already gotten it right. With a 50% rise in conversion rates year over year, this merchant of outdoor lifestyle products has seen some significant company development in recent years. Their success also has a lot to do with targeted emailing.
- Use a discounting approach.
You’ll eventually need to reduce your excess product to keep things moving and clear shelf space. Why not conduct a quick flash sale if you need to sell your inventory quickly? Nothing motivates individuals to act and encourages spending like the fear of missing out.
Of course, you don’t have to lower your rates immediately. Instead, you may perform incremental discounting by beginning with a modest reduction of five or ten percent and progressively raising it to twenty or thirty percent as time passes. You may add more goods at that price after identifying your sweet spot for reduction.
Ordering only the items you are confident you will use, or need can help you avoid building up surplus inventory. This calls for precise planning and forecasting based on past sales data and anticipated patterns, seasons, and events. It’s crucial to account for lead periods or the interval between a purchase and a replenishment while predicting inventory.
Manual forecasting may be risky depending on your company’s scope and size, whether you’re a multichannel shop or a tiny business startup. Inventory management becomes incredibly difficult when several offline storefronts, internet sales platforms, and storage facilities are involved. However, it is feasible with the correct equipment.