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5 Ways Retailers Can Unload Excess Inventory In taking these five steps, you'll be able to manage excess inventory — and the risks and headaches that come with it.

By Ana Wight Edited by Micah Zimmerman

Key Takeaways

  • Half of U.S. retailers are dealing with excess stock and 27% wrote off surplus inventory as a loss in 2022.

Opinions expressed by Entrepreneur contributors are their own.

The struggle is all too real when it comes to excess inventory in retail. Market volatility and unpredictable events make it difficult for merchants to accurately forecast demand, resulting in excess stock.

That, coupled with inflation and the fact that consumers are being more mindful of discretionary spending, means retailers today are holding on to more inventory than they're comfortable with.

Retail Customer Experience reports that half of U.S. retailers are dealing with excess stock and 27% wrote off surplus inventory as a loss in 2022. And if that weren't concerning enough, 53% indicated their business will face "dangerous ramifications" if the excess stock remains unsold.

In light of these challenges, it's crucial to implement strategies that address excess inventory head-on. That way, you can minimize financial losses, create space for new merchandise and improve overall business performance.

Let's look at five ways to do just that.

1. Be proactive with stock transfers

If running multiple stores, regularly review stock levels across different locations. Optimize inventory distribution by strategically unloading (i.e., transferring) surplus stock from locations with high inventory counts to those with greater sales potential.

For instance, if a certain SKU is underperforming in one store, but is doing well in another, consider initiating a stock transfer sooner rather than later. Don't wait until the end of the season to take action. Pay attention to your daily and weekly sales data, then take preemptive measures accordingly.

Quick, decisive action is possible if you have a centralized retail inventory management platform for all your locations. By ensuring all your stores are managed from a single system, you gain better visibility into your inventory levels and streamline operations.

Related: Free Up Your Finances By Avoiding the Pitfalls of Excess Inventory

2. Leverage your online store and marketplaces

Expand your reach beyond brick-and-mortar by setting up shop online. This doesn't just mean selling on your website; in many cases, retailers will benefit from selling on social media and online marketplaces.

These platforms provide access to a vast online audience actively seeking products, so by listing your excess inventory on these sites, you'll be able to get more eyeballs on them—and potentially more sales.

3. Re-merchandise products

In some cases, it isn't the product that's stale; rather, it's the merchandising strategy behind it.

Unloading excess stock doesn't necessarily mean donating products or selling them for a massive discount. If you're sitting on surplus products, you may be able to sell them faster by changing how they're displayed.

Perhaps you can showcase unique ways to use an item. Maybe you can implement a bit of storytelling in your windows or shelves. Think outside the box and get creative with your displays to make surplus products more enticing to customers.

Related: The Best Way to Move Your Excess Inventory

4. Implement promotions

Sales and promos are classic tactics for getting rid of surplus stock, and for good reason: they work. Research from Google reveals 87% of shoppers say that getting a good deal is an important consideration when deciding which retailer to buy from.

As for which type of offer to implement, consider the following.

Discounts: Incentivize customers to purchase surplus stock by offering discounts. This can include seasonal sales and clearance events. In some cases, you could instill a sense of urgency by running flash sales or limited-time promotions to encourage customers to take action ASAP.

Buy One Get One (BOGO): Get rid of surplus stock faster by selling them two (or more) at a time. BOGO promos lend themselves well to categories like apparel and accessories; shoppers appreciate the opportunity to mix and match. BOGO also works well for beauty products, as customers enjoy the chance to stock up on cosmetics and skincare items.

Gift with purchase: If you're having difficulties unloading excess inventory, offer them as freebies. This tactic clears out excess stock and can improve basket size and order values, especially when you offer gifts with qualifying purchases.

5. Negotiate return to vendor agreements

Consider using return-to-vendor (RTV) agreements to address excess inventory. RTV contracts allow retailers to return unsold merchandise to the original suppliers.

Depending on your relationship with vendors, it may be feasible to negotiate the ability to return unsold products. Remember that an RTV agreement could mean paying more per unit.

RTV agreements can also add complexity to your operations, especially if you're running multiple stores. Coordinating the logistics of packing, shipping and tracking unsold goods can be difficult and lead to operational costs.

Final words

Getting rid of excess stock requires a strong inventory management system and a proactive approach to inventory management. You can reduce the negative impact of surplus stock by keeping a close eye on your inventory reports and taking proactive steps to correct course.

From there, ensure you cover all your sales channels to get merchandise in front of as many shoppers as possible. And if you want to boost conversions, add some promotions to the mix. Finally, consider negotiating RTV agreements with your vendors to minimize the risk of surplus stock.

Ana Wight

Entrepreneur Leadership Network® Contributor

General Manager, Retail at Lightspeed Commerce

Ms. Wight has over 15 years’ experience across strategy and operations in the TMT sector across both B2B and B2C, and in corporate, management consulting, and start-up environments. Prior to her role as GM Retail at Lightspeed, Ms. Wight was the CEO of Vend.

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