9 ways retailers can manage surplus and overstock inventory
Jackson Versitano, Regional Manager, UK & RoEMEA for Lightspeed Commerce
Spring cleaning season is upon us. The time of year where retailers across the globe clear out their store cupboards, reorganise their displays, dust off old stock, and focus on clearing out surplus inventory. It’s not a fun job, we’ll admit. But, once it’s done, you’ll be able to claim back money from unsold inventory, build greater customer loyalty, improve community engagement, and free up some space for some new summer swag later in the season. Let’s get started.
- Transfer your surplus inventory to other locations
If you have other stores, you can transfer any excess inventory you’ve accumulated over to them. Analyse your inventory and see where you’re running low on stock in other locations. There’s a chance that you can move your stock around without having to discount it, or give it away.
- Adjust the way you showcase and price your overstock inventory
Whenever you have items that aren’t exactly flying off the shelves, you may benefit from rearranging how you display your inventory. Your store’s layout, displays, and product density are all important factors as to whether customers notice your stock, and decide to buy it.
Consider moving it somewhere else in the store where you may have noticed customers tend to congregate more frequently. Freshen up your display, move things around the store, and create new brightly-coloured signage to promote any surplus stock. Make it look new and fresh for your staff and customers who may not have even seen the items in the previous location.
You might want to reconsider your pricing strategy, too. This can be a discount, a sale, or just a default lower price. You could even bundle slow-moving items with similar products that are more popular.
- Discount slow-moving inventory
We’ve already partially covered this, but it bears repeating. Discounts are a tried and true way of selling off excess inventory. You should create discounts for products in increments. Start with 10%, jump to 15%, or 20%. And, if items still aren’t moving consider dropping the price further. You’ll obviously want to do your best to still turn a profit, however marginal, on these items, so consider that before dropping prices too low. You can even run a flash sale (think Black Friday/January Sale type of thing) and encourage customers to come to yours hoping to find some great deals. Give your customers an ‘if I don’t get it now, it won’t be here later’ mentality and sales will soar.
Buy One, Get One Free (BOGOF) promos are some common examples of multi-buy discounts. This type of promotion can be quite effective in moving excess stock whether you’re selling off merchandise that are purchased in sets (like clothes), or commodities (like home supplies).
- Offer the slow-moving inventory as gifts
Do you know anyone who doesn’t like gifts? Us neither. They don’t exist. Everyone likes to be treated every now and then. And, if you’ve got surplus stock to hand, you have the perfect opportunity in front of you. Reward your customers. Surplus inventory can be leveraged to further enhance customer loyalty and satisfaction.
Sure, you’re not going to be reclaiming any money back for the goods in question, but you are building positive customer sentiment with your customer base. Plus, you can even use gifts as a way of driving more sales if you were to advertise a “gift with purchase” promotion online and in your store, as you might be able to convince browsers and window shoppers to convert.
- Use the services of an inventory liquidator
Inventory liquidation is where you sell large quantities of stock with the purpose of clearing out unwanted, or surplus, inventory. Liquidators will usually buy inventory from businesses going out of business, but some will also buy surplus inventory from any old business.
If you’re having no luck moving your inventory on your own, you can contact an inventory liquidation company to sell off your goods. You likely will not get back the initial price you paid for the goods, but you won’t be losing your entire investment either.
- Return or exchange it
You might be able to return or exchange items you don’t want any longer. Get in touch with the vendor you initially purchased the stock from to begin with and ask, if possible, to return the merchandise, or exchange it for credit or new merchandise. Just be sure you are keeping the merchandise undamaged and in fresh packaging.
- Sell them on online marketplaces
Online marketplaces aren’t just for consumers. You can use these platforms, as a retail business, as a side hustle to sell off any unwanted merchandise you may have. Popular options are eBay, Amazon, or Etsy (depending on what your business sells). This will take a bit more time. You’ll have to create new product pages for each of these items. But, you’re opening yourself up to an entire marketplace of people who may not have otherwise seen your stock. This is also a great way to get your name out there, too.
- Make a charitable donation with the surplus inventory
If all else fails, and your customers simply aren’t interested, there is another way you can salvage your overstocking issue: charitable donations. Of course, again, you won’t make money back from this. But, needless to say, that isn’t the point. With cost-of-living crises abound, donating your stock may not seem financially prudent, but your community, and members of it, will benefit tremendously from your generosity.
Depending on what you sell and what you’re looking to move, amateur sports, community kitchens, support groups, or other local organisations might benefit from your donation of store inventory.
- Recycle your surplus inventory
If you’ve exhausted all other options (besides donating to charity), you might have to eat the cost and recycle them.
This option should be your last possible resort. You make no money back, nor do you get a chance to reward your customers or give back to your community. But, if the other options we’ve covered don’t offer you much luck, it’s better to bite the bullet and free up your storage space for newer, fresher inventory.
