Following my 3 part blog series covering the 10 steps to right-sizing your inventory (you can read part one here), it only felt natural to continue to explore the next part of the process. Once you’ve identified the non-performing portions of your inventory, the next question is, “what do I do with all of this inventory?”
It is always easier to find the problem than to solve the problem and maintain your inventory so the problem does not come up again. Dead inventory is always a struggle, in the back of many wholesale distributors’ minds, because it is a common belief that the inventory will be needed “someday.” The problem is, you don’t want to become a hoarder, keeping inventory that hasn’t moved in 6, 12, even 24 months. Hopefully this blog will share some helpful tips on how to avoid and solve such a problem.
In this 3 part blog series I will discuss 10 ways to get rid of the dead inventory you have identified through your analysis. Cutwater has the ability to quickly and easily identify exactly which SKU’s are either excess or dead in your inventory.
In this blog I will discuss the first 3 ways to get rid of your dead or excess inventory:
Return it: If you are allowed to return the product to the source, it is the best option. They might be able to make use of it elsewhere. If they are a manufacturer, they might be able to rework it into something else. Or, they might be able to sell it to some other customer.
This is the best resolution that results in the least amount of loss. While you may not get your full value returned to you, it is still better than you losing money having the inventory just sit on your shelves.
Move it to the home page: This option is available to web retailers and e-commerce. If a particular color of an item is not selling, but the item as a whole remains popular, then moving the non-popular color or model to the default option increases its sales. This has been proven by research.
If people are coming to your website often and they constantly see the same product, eventually that product will get stuck in their mind. While this may not solve the dead inventory problem 100 percent, it will still reduce the dead inventory significantly.
Offer incentives: Consider offering price or other incentives to increase demand for the unpopular color or model.
For example, if very few customers are buying a product, and you have access to it, consider offering it to the same customers at a volume discount so they take more of it.
These are just the first 3 steps to reduce your dead and excess inventory. I will continue the list in part 2 of this blog series. I would love to hear your thoughts on this topic. Please feel free to leave your comments on how you reduce your dead and excess inventory.