If you are a manufacturer or retailer then you know that having excess inventory is bad for business. After all, you are in business to make money.
But there is no money being made with goods in the warehouse. Goods that are not being sold. Among the many disadvantages of excess inventory, the major one is the high cost of managing it. You will be worried and rightly so. Because:
- Those goods that may go out of fashion.
- Their prices might drop giving you a considerable loss.
- Or worse. They may expire and get spoilt.
So, what to do?
It is neither an easy nor a pleasant task to manage inventory, excess or not. But the current economic crisis has necessitated that you should find the best ways to manage your excess inventory.
Before learning how you can manage your excess goods, you need to know this. you should not beat up yourself over this. It is not necessarily your fault that you have excess goods. It doesn’t mean you are stupid, lazy or foolish. In the present economy, even some perfectly managed business still find themselves with inventory that have not been sold.
You see, as inflation rises and prices of goods rise, people try to save money. They buy less and this can cause a backlog of goods in stores nationwide, leading to excess inventory for most businesses. Instead of moaning about the situation, try and remedy it.
Since it is unavoidable, here are some of the ways you should deal with any excess inventory in your possession.
First, you need to do a thorough audit of your store. This is important so that you know what exactly you have in there. You can put everything in an excel sheet, so you can easily see how much of what you have in your storehouse.
Secondly, know the cost of each item. This is necessary because you need to know the amount of money you can sell the goods in case you see a buyer. You should know both the wholesale and retail price of each item.
Next, comes the selling. You have to sell off those goods and to do that you need a serious buyer. Usually, at this stage, you will not look for someone who will buy one or two units of product. You need someone to take everything. So you can go with agencies that buy stock so that they can you help you sell off your excess goods.
After you have found who to give your goods to, you start the negotiation. When you are doing this, be sure to know your limitation. Don’t try to get the maximum gain on your goods. On the other hand, don’t sell off your goods as if they lack value or you didn’t buy them with money. Find a middle ground.
Now, you can now close the deal. Check that you have everything you need in place, that is, you have done your audit, gotten exactly the price you feel is right to sell, found the right inventory buyer and have made some good negotiations. Then, close the deal and take the money.