Tips for Managing Excess InventoryAugust 10, 2016
A continuous flow of inventory is a major goal for ecommerce businesses. But when seasonal, market, or other fluctuations negatively affect your sales, you may find yourself stuck with excess inventory. Consider the following tips to address the excess inventory you have, and keep more of it from building up.
Make a plan ASAP
The longer you wait to do something about your excess inventory, the more problems it causes by taking up space (which is even worse if you are leasing additional space just for excess), increasing taxes (if you wait until that time of year), and potentially devaluing (if the next iteration of a product is around the corner, demand for the previous iteration may drop even lower).
Liquidate in moderation
Perhaps you’re willing to deeply discount excess inventory to get rid of it quickly. But, if you find yourself doing that on a consistent basis, it can spell trouble for your profitability. If you liquidate regularly, you’re losing out on profits without addressing the root cause of the excess inventory. Consider a change in marketing strategy to renew consumer interest, or move on to different product lines.
Partner with a charity
Donating your products can do more than just spread goodwill. If your business is eligible for them, the federal tax deductions you receive may even be better than what you’d get from liquidation. A gifts-in-kind organization can help you donate excess inventory to where it’s needed.
Optimize your Inventory Strategy
Because excess inventory can tie up your working capital and warehouse space, it’s best to try and avoid it in the first place. With Fulfillment Works, our state-of-the art inventory control management system is fully automated to help you manage your inventory by sending out real-time movement history reports, current usage analysis reports, and other metrics to maximize the efficiency of your inventory levels.