Physical space for stocking inventory is valuable real estate when you're a small business owner. Every extra inch matters. Whether your stock is kept in the back office, remote warehouse or even your living room, you need to do everything you can to keep it all moving. Stagnant inventory processes will not only cause a backup in your operational efforts, it will also cause major chunks of your cash flow to halt.
If you feel like you're drowning in inventory, you're not alone. Several business owners just like you are faced with this same issue. Anticipating the perfect purchasing plan seems nearly impossible. And selling old or extra inventory can be one big headache. However, with a bit of creative exercise and hustling skills, you can maximize profits on any excess inventory.
Here is how to make the most of your extra inventory:
To prevent excess inventory in the first place, make sure that you are optimizing your operations systems so items are constantly moving. Even if you are running the entire business yourself, you must focus on maximizing value in every action you make. In fact, it's even more important when you're running solo. The longer products sit on a back shelf, the more likely they are to be forgotten. Constantly keep things moving on your floor if you have a brick-and-mortar. If you only have an online store, you must continuously think of different marketing strategies that allow you to creatively reframe your products. To start, think of as many different stories that product can tell. Talk to your customers and find new voices that can carry that story and help you provide value in certain areas of your operations, marketing, etc. This all comes back to optimizing value with each product or line you sell.
Here's a great example of how customer research can benefit your sales of extra inventory. Look at previous customer behavior and see what they often buy together. If you’re having an issue selling products individually, try bundling them and knock down the price or offer some type of discount. For customers, this will provide them with a better value without cutting too much of the profits from your business.
Think outside the box when it comes to bundling. Don’t just offer a three-pack of shirts or six pints glasses as a discount, rather curate the bundle. If customers are buying baseball hats, crew neck tees, and not purchasing khaki shorts, offer a bundle of all three for a discounted price and market around an event, season, or holiday.
If you have a list of customer email addresses, create a campaign around referrals. Encourage them to “tell a friend” about your company in exchange for a free shirt, bag, etc. This is a great way to use word-of-mouth marketing without dropping actual dollars, by leveraging old items that would have otherwise been collecting dust.
Inventory liquidators will buy your items in bulk and sell them on your behalf. Liquidation.com is a great B2B marketplace where you can sell your products to other businesses online. Another similar option is B-Stock Solutions, where they take your inventory and list it within an auction. When you auction your excess inventory, there’s a chance to receive a considerable higher price for your inventory.
Before you approach a liquidator, make sure you clearly understand the value of your inventory and what you’re willing to sell for negotiations, and stick to your price.
This is a fairly new idea, but you can utilize the growing phenomenon of subscription boxes to off-load your excess inventory and also gain word-of-mouth recognition for your brand. While you may end up donating them or offering them at-cost to which ever service is interested, however, it will have a positive effect in the end. Cratejoy is the best site for finding subscription boxes from establishing to up-and-coming companies.
After you’ve exhausted all other channels, or even if you haven’t, another option is to donate your inventory. Your incorporated business can earn above-cost, federal income tax deductions. Before you do this, be sure to research what small businesses can and cannot write-off. Also, if you find a charity that falls in line with your brand, you may also be able to work out a partnership for public relations exposure.
With these ideas in hand, decide which is best for your business, and what is most financially viable. You can always try a few different options to see which is the most successful.