Do you have products that are expiring on the shelves or getting dusty in the back room? Leftovers can be a drain on your resources, but they can be renewed and repurposed with the right approach. While not every excess product can be turned for large profits, there are a lot of ways you can turn potential losses into company gains. Here are some of our best tips for how to use and sell excess inventory.
Why is it Bad to Have Too Much Inventory?
Too much inventory may seem like a minor problem at first, but inventory you can’t sell is a drain on your business. Excess inventory specifically to inventory that is not expected to sell, and especially inventory that is or soon will be unsellable. Not only is this money down the drain, but it can sap additional resources from your business through wasted storage costs, and later cost money to dispose of.
So, what happens to excess inventory? For most companies, it gets disposed of, resulting in either food waste or fills up local landfills. But you don’t have to let your excess inventory turn into a business and environmental disaster. If you want to cut down on waste and revive your revenue, we have lots of ideas to help you sell old inventory.
Why Does Inventory Not Sell?
When products don’t sell, it can be hard to determine what went wrong. But sometime the problem isn’t even the product itself. If you want to cut down on excess inventory, your first step should be to identify why it didn’t sell in the first place. Here are a few common reasons that good products don’t perform well in the market.
- Product is seasonal: Specialized products for holidays or specific seasons are tough for businesses, because you have a limited time to sell but you want to sell a lot. Unless a business orders too few products, this almost always leads to at least some excess.
- Product is overpriced: Any product can be sold, but the price you have in mind doesn’t always match what customers are willing to pay. When the cost of production exceeds what customers are willing to pay, products become discontinued and the excess becomes waste.
- Product is perishable: A common problem for restaurants and grocers, some products, like food, expire quickly and can become wasteful excess when you have more than you can sell.
- Marketed to the wrong audience: Sometimes the product is good, but your marketing is aimed at the wrong people. This means that the ones who hear about your product are the ones who aren’t interested in it, and the product doesn’t sell.
- Marketed at the wrong time: Some products fail due to a matter of timing. For example, if you market one product at the same time as another, and the other is more popular, the second product may not perform well as it becomes overshadowed.
- Lack of exposure: A lack of marketing can be even more detrimental to sales than poorly timed or poorly aimed marketing. If customers aren’t hearing about your products, they aren’t going to buy them.
What To Do With Seasonal Excess Inventory?
Halloween decorations, summer wear, holiday wrapping paper, and other seasonal products become obsolete once their intended season is over. So what do you do with all of that excess? Here are some tricks for how to get money from inventory that is approaching or passed its prime.
- Use in promotions next year: For products that you know will be relevant come next year, see if you have some storage space so you can reclaim your revenue when their season comes around again.
- Gift at the end of the season: Excess inventory can be a great gift for employees when the season ends. If you have leftover holiday products or seasonal sellers, offer them as rewards to high-performing employees or as gifts at company events.
- Offer last-minute discounts: If there’s still time left before your products become obsolete and you don’t have the space to store them for next year, use last-minute promotional sales to get those products out the door and cash in while you can.
- Sell online: You may not have the storage space to save products until next year, but some customers might. Many customers shop online to save on out-of-season products in preparation for the next year.
- Pass it on: When someone has debt they know they can’t collect on, they sell it to debt collectors who are willing to try. You can do the same with expiring products by offering them at a discount to other companies who might be interested in selling your excess for themselves.
- Offer clearance: Clearance aisles were basically made for seasonal excess, so have your own to help reach more frugal customers while moving products you know you won’t be selling for more.
What To Do with Underperforming Inventory?
If your products aren’t necessarily expiring but they’re wasting storage space, it’s important to get your merchandise moving. Inventory that doesn’t sell, even if it won’t expire, is a drain on your business and takes resources away from more revenue-generating products. Here are a few ways to breathe new life into underperforming products and sell old inventory.
- Re-evaluate your target audience: Who you’re selling to can make a huge difference in sale numbers so make sure your marketing is reaching the right people. Need help? Check out our other blog post about finding your target audience.
- Re-evaluate marketing strategy and timing: If you have good products that just aren’t performing well, take some time to evaluate your marketing strategy and identify issues in timing and approach. Sometimes something as small as your ad style can make a huge difference.
- Offer bulk discounts: If you need to move out your inventory, selling in bulk can help you unload excess inventory quickly with only minor discounts. This is especially effective when sold online, where many people and businesses look to find bulk deals.
- Bundle with other products: If the product by itself isn’t enticing enough to earn revenue, try making it part of a bundle. For example, if everyone loves your soap and lotions but aren’t as interested in your loufas and nail kits, bundle them together for a self-care package that is perfect for holiday gifts and promotional deals.
- Pair with a giveaway: If you don’t want to pair an underperforming product with your best-sellers, try adding promotional products to sweeten the deal. Branded bags, drinkware, and pens can make great accessories to all sorts of products and leave your customers feeling like they got a bargain.
- Offer discounts: While discounts aren’t ideal long term, a brief promotional discount can help get you more reviews on a product and more interest, sparking better sales going forward or at least enough to help you clear out your excess.
What To Do with Perishable Excess Inventory?
If you have excess inventory that is running down the clock before it becomes trash, there is a very small window of opportunity to make use of it before nobody can take it. The best approach is to have a plan for your excess long before your products approach their best by dates so you can take full advantage of that window. Here are a few options for restaurants, grocers, and others with perishable products that go to excess.
- Donate to charities: Food and other perishables that can’t be sold can still often be donated to charities, homeless shelters, and other causes. While this may feel the same as throwing it away, donated products can be written off for tax benefits and help improve your community connections.
- Offer late-sale discounts: Especially useful for food, offer your excess at the end of the day at a discount to squeeze last-minute sales out of baked goods and other products that won’t be sellable later.
- Use in employee rewards: Whether it’s free food at the end of the day or first pick of expiring goods, employees love getting giveaways as part of their company benefits. This can help with employee morale and retention, turning your excess products into an investment.
- Sell in bulk to other businesses: If you make your own products and know you can make more than you sell, let other local businesses take on some of the risk. Offer your products in bulk orders, leaving you with no excess and guaranteed returns.
- Pad sales with longer-lasting products: You don’t have to let all of your revenue depend on perishable products. When you have non-perishables for sale, you can afford to have fewer perishables than you need, eliminating your excess while still having something for late coming customers to buy.
While excess inventory can cause serious problems, properly managed excess can open opportunities for new and unexpected benefits. Whether you’re using your excess to connect with your community, improve employee retention, or take it as a challenge to get creative with your marketing, even leftover products can have great benefits for your business. Embrace your old inventory and find new ways to use and sell excess inventory.
