How to Manage Unsold Stock

No matter the size of a business, keeping dead stock within your facility can have the potential to kill a company. Deadstock alludes to all of the products that manufacturers fail to sell and have a low chance of selling in the future but are still stored within their warehouses. This form of inventory is not to be confused with returned items as the dead stock has never been sold. Products that fall under the unsold category can include seasonal items, the stock that is dated – such as boxes having ‘Happy New Year 2021’ – or generally unpopular items that don’t fall into the top-selling product groups. Dead stock can represent a lack of income and also create organisational issues throughout the supply chain. The unsold items can take up essential space for more popular stock and cause your staff unnecessary stress whilst trying to organise around the dead stock. The management of unsold inventory doesn’t always need to be a long and complicated process. By creating a strategy for identifying, shelving, or returning unsold goods, you and your staff can resolve issues surrounding unsold items.

One way to move any dead stock is by selling unpopular items with other fast-moving, hot-selling products. You can do this by offering the less popular stock as a complimentary gift or selling a combo deal at a special price to customers. Both of these techniques are effective yet wise ways to move unwanted inventory. Even though your consumer base might not want these items, it is a known fact that individuals are attracted to buying products that come at a special price. This is the same for bundle deals as well. Customers will see the deal and believe it is of good value, if they don’t purchase the offer then they will think that they are missing out even though they probably would never have purchased the dead stock otherwise.

If you can alter the pricing of products, then it is a good idea when you notice certain items have been stored within the warehouse for a long period. You can start slowly moving these items by applying strategic discounts. This will often have the same effect as combo deals as the buyer believes they are purchasing an item at a great price, but in actuality, the storehouse just cannot get rid of the product. Implementing flash sales or lowering prices will increase the less popular stock’s sales. You might lose more money than first expected when you purchased the items but at least you won’t lose all of it like you would if you wrote it off.

To move unsold inventory, you can hold large clearance events where you list all your dead stock on one sales page and add further discounts to the already reduced-priced products. You can advertise this huge clearance by sending a series of emails to customers as well as promoting the sale on all of your social media channels. This way of selling your unpopular inventory won’t increase profit margins however, it will generate cash flow whilst freeing up space on shelves to enable your operatives to fill them with more profitable items. It is recommended that clearance sales start with 20% discounts, but this can be increased if products are not selling as quickly as you would like. Flash sales and clearance pages are effective methods for selling urgency to customers. It is an impactful way of selling off stock, whilst keeping customers happy and introducing a new set of consumers.

One of the more obvious methods of removing unsold inventory from your warehouse is by returning the items to the retailer. Before this is done, you will have to see whether the company allows this because if it has been a long amount of time, the seller might have discontinued the products themselves. You could get lucky and receive a full refund for items, but they also might offer a partial refund, promise to sell you other products at a discounted price or provide you with a credit to spend on their stock. What’s more, you will most likely have to pay for shipping costs as it is highly probable that they will not allow a discount on the delivery of the stock back to their business. At this point, you should weigh up the different aspects of whether you can move the stock on your own and create a small profit from it. Or whether it is more worthwhile for the business if you return items despite the loss in money and payment for shipping. If you decide to return to the retailer, the quicker the turnaround of the dead stock, the better. If it surpasses a year, the chances will be lower for you to receive a full refund. You should also ensure that all returns are clean, undamaged and in fresh packaging, to allow your refund to be as high as possible. You don’t need to lose more money than you already have.

Consumers are constantly looking for companies that uphold ethical standards, so one way to impress customers whilst also doing the right thing for society is to donate any unwanted stock from your warehouse to those in need. Donating items is the best way to make light of an undesirable situation, as well as helping the environment by not allowing stock to be just used once. Instead, it can be recycled in other people’s businesses or homes. Therefore, you can improve your business’s eco-credentials whilst doing the most beneficial thing for the planet, not just throwing all your unwanted inventory away without any effort to reuse it. Research further shows that 52% of buyers believe that the future of the planet is the responsibility of manufacturers, so if you are showing your consumer base that you are passionate about the environment, it could repay you in sales from said customers. A final benefit of donating to charity (apart from it being the right thing to do of course!) is that you can save money on tax and in turn, recover part of the original cost of the product. The more your company donates to charity, the larger the deduction on your tax return!

Unsold inventory is a massive pain for warehouses as it can add to company costs to store it whilst also increasing storehouse disorganisation. That is why selling off unwanted items within your facility is essential for the success and survival of your business. Strategising how to remove this inventory from your building could potentially gain you some small profits alongside improving worker productivity and the smoothness of warehouse operations. So, if you haven’t already, re-assess your current stock movement and whether it is time to remove certain inventory from your warehouse. To get help with storage solutions or to buy high-quality racking, shelving, flooring, and so much more, shop with BiGDUG today!