Rid Your Business of Zombie Stock Before the Holidays Your old inventory, like the undead, will haunt your shelves. Free yourself with these five methods.
By Brandon Levey Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
The spooky ghouls and goblins of Halloween may spend their evenings haunting the living, but several retailers will be up late facing a different kind of nightmare -- unsold inventory. Even if the prospect of zombie stock doesn't scare you now, it will once the spree of holiday shoppers dies down.
Physical space for stocking inventory is valuable -- every extra inch matters. Whether stock is kept in the back office or remote warehouse, it should always be in motion. Stagnant inventory cannot only cause a backup in operations, it can also cause cash flow to slow to a trickle.
If you feel like you're drowning in inventory, you're not alone. Anticipating the perfect purchasing plan is tough and selling old or extra inventory can seem like a big headache. But, with the tips below and some hustle, you can effectively resurrect revenues from dead inventory.
Related: What You Need to Know About Managing Retail Inventory
Here are the top five ways to eliminate any zombie stock:
1. Streamline your operational processes.
To prevent excess inventory in the first place, make sure operations are optimized, allowing for a constant flow of inventory. The longer products sit on a back shelf, the more likely they are to be forgotten.
Constantly keep things moving on the store floor and off the shelves of the warehouse. The best way to do this? Keep track of how long an item has been in inventory and set a sell-by date. Then actively work to get past due items sold or put them to other good uses.
2. Offer a discounts or bundle.
If you've got a lot of inventory past its sell-by date, start thinking about creative ways to discount to clear out those items. Buy-one, get-one offers are one example of a discounting strategy that moves a higher volume of items.
Another option if you're having an issue selling products individually is to try bundling slow sellers with faster sellers at a reduced price. This approach moves product, delivers value for customers and minimizes the hit to profit margins.
Related: Tackling the Unsexy Business of Inventory Management
3. Leverage products as incentives.
Encourage customers to "tell a friend" about your company in exchange for a free shirt, bag, etc. It's a great way to spur word-of-mouth marketing by leveraging old items that would have otherwise been collecting dust. It may not bring in cash for the item, but it will build awareness and loyalty while clearing out stock.
4. Sell inventory to a liquidator.
Need that shelf space back pronto? Unable to clear remaining unsold items? Try connecting with an inventory liquidator. Liquidators will buy items in bulk and sell them on your behalf at a discount for a small piece of the proceeds.
Liquidation.com is one business-to-business marketplace that helps sell your products to other businesses online. Before you approach a liquidator, however, make sure you clearly understand the value of your inventory and what you're willing to sell it for.
5. Donate for a tax deduction.
After you've exhausted all other channels, or even if you haven't, another option is to donate inventory. Your incorporated business can earn above-cost, federal income tax deductions on items you donate.
If you find a charity that falls in line with your brand, you may be able to work out a partnership that can also drive some public relations for your business and the charity. Before employing this strategy, be sure to research what businesses can and cannot write-off.
Do you have any other tips for reviving cold, dead inventory?
