How to Solve an Inventory Surplus

Javi Fondevila

Having an inventory surplus is a big no-no if you are running an online retail store, or any other kind of store that sells a physical product (especially if your products expire!) In addition to taking up lots of additional space, an inventory surplus can tie up your company’s capital and stop you re-investing into your business or buying things that you need.

This is why it is important to practice good inventory management and pay attention to what you have, what you are selling, and what you need. Keeping an eye on how your products are moving can help you make the right purchasing decisions and avoid an inventory surplus.

Still, an inventory surplus can sometimes be caused because of factors beyond your control.

5 Ways You Can Get Rid of Excess Stock and Resolve an Inventory Surplus

If you already have lots of excess inventory, though, it can be difficult to get rid of it while still making back your original investment or a small profit.

Here are a few tips and ideas you can use to liquidate your excess stock and claw back some of that all-important capital.

1. Sell the stock at a strategic discount

Would you rather your excess stock sits there and collect dust or would you rather it earns some money, even if it’s sold at a discount?

Of course, you’d prefer the second option—don’t start slashing prices in half from the get-go, though.

You can try incremental discounting to get rid of items that just won’t sell. Start with 10%, then up it to 20%, 25%, 30%, and beyond if you need to. Obviously, if the stock starts flying out the gate at a 20% discount then you won’t be rushing to up it to 30%.

Try to go the extra mile by instilling some urgency in your customers by holding a limited-time flash sale.

2. Bundle items together

Bundling is another commonly-used technique that vendors and merchants use to get rid of problem stock. In fact, it is the second most popular pricing method for retailers across a multitude of e-commerce sectors.

If it makes sense, think about grouping certain products together and sell them at a price lower than it would cost to buy them separately.

Don’t, however, group together products that don’t make any sense—beauty products shouldn’t be grouped with t-shirts, for example. Bundling products together that are sold at a good price level will usually be tempting for consumers and this is a win for both you and your customer.

3. Give items away as incentives (or freebies!)

If some of your inventory surplus is comprised of low-cost items, why not consider giving them away? Especially if they are very tough to sell despite your best efforts.

For instance, you could use some as a bribe or reward for signing up to your email newsletter, spending $X amount, or for buying a particular product. This, in the long-term, can lead to sales you otherwise would not have made.

4. Ask the manufacturer for a return or exchange

Asking the original manufacturer or vendor to exchange your inventory surplus for a credit refund or new merchandise is a potentially viable solution, too.

More often than not, vendors are more than willing to keep their long-term customers—you!—happy by taking back stock that isn’t selling. If you have a particularly good relationship with one of your vendors or manufacturers, then this is an option well worth exploring.

Just make sure that the stock you do return is in its original, undamaged, and pristine state.

5. Approach liquidation companies or sell via online marketplaces

Try selling the excess stock on sites like eBay, Etsy, and Amazon. While this route might take a little bit of time to explore—you’ll need to create product pages for them, for example—they can be great solutions if you have problematic stock that you just can’t seem to shift.

Alternatively, you could approach a liquidation company and simply sell on your inventory surplus to organizations that specialize in buying excess stock from merchants. These organizations tend to pick and choose items, though, and buy at the lowest possible price point.

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