Surplus inventory is a challenge faced by almost every business. Irrespective of the size of the business, inventory management is one of the most crucial aspects which must be achieved seamlessly.
What is Inventory management?
It is the supervision of non-capitalized assets (inventory) and stock items. A component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale. And surplus inventory is when supplies used are lesser than the stocked, affecting the profit margin and the unsaleable. Retail inventory piling up is a big no-no for any businessperson as it not only takes up excess storage but also restricts a business from reinvesting and buying goods which are actually required. Paying regular attention towards inventory data and sales is extremely crucial as it directly impacts the purchasing and marketing decisions. With the help of an inventory management software like TallyPrime, merchants can easily and seamlessly keep a track of their inventory flow and stock availability.
Retail inventory is usually in surplus when merchants try to be optimistic and be prepared for unforeseen events in the future when supply has to meet the demands. However, sometimes this is misjudged and thus results in stacking up of excessive inventory. Managing surplus inventory through an inventory management software can help maximise profits and yield in further investment proving to be fruitful for the business. Constant monitoring of the excess inventory is extremely crucial for a business if the retailer does not want the year-end balance sheet to get adversely affected. The value of stacked up physical inventory keeps depreciating after a year has passed and instead of holding them back in the warehouse, it is always advisable to clear them immediately. Liquidation of excess retail inventory is one of the best ways to minimise the loss and get rid of the unnecessary stack. A good inventory management software would help you track the surplus inventory and take appropriate action to liquidate them.
Here are some of the best-proven solutions to get rid of extra retail inventory and maximise profits for your business.
- As a part of your periodic merchandising study, develop a contribution to profit analysis. Keep a close track of and analyse your product sales and assess them for liquidation.
- Liquidation and clearing of excess inventory can also be done by holding clearance stock sale and selling them at discounted rates. This way not only will your business be benefitted by not affecting the profit margin adversely, but the consumers would also make the most of the steal deal.
- Products can also be remarketed and sold using different marketing strategies. This is a great opportunity for retailers to be creative with their product.
- Packaging and bundling the excess retail inventory with high priced products is also one of the most effective ways to liquidate them. Ensure that this bundled packaging also highlight the freebie effectively, so that it does not lose out on its qualities.
- If none of these solutions work, retailers can sell the surplus inventory to liquidators. Inventory liquidator is a person or a company which buys non-saleable products at a deeply discounted price or would buy your redundant products and then resells them using his/her branding. Although, this may incur some loss for the retailer, but it’s definitely better than having stocks pile up in the warehouse adding zero value to the business.
While merchants can always find ways to get rid of excess retail inventory, it is best to avoid such a situation. Thus, to run your business worry-free and eliminate the trouble of planning for removing surplus inventory, avail the benefits of tracking your supplies and stock with the best best inventory management software, TallyPrime. Check out TallyPrime's features.
