Is inventory management weighing you down? Especially in the wake of the bustling holiday shopping season, you may have a surplus of items piled on store shelves or in storage. Excess product is bad for business — it ties up cash flow, takes up valuable space in store and in storage, and stale product could negatively affect conversion in store.
Customers wants to see a fresh selection in store and online on a regular basis — especially your loyal customers who check back often. Not to mention the degrading value and quality of inventory that expires or is perishable. With that in mind, you can see the value in having strategies on hand to liquidate that inventory.
Getting rid of your excess inventory is a necessary part of any retail business. But it’s also an opportunity to improve your bottom line. So let’s take a look at six ways to get rid of your surplus inventory.
1. Strategic Placement
For in-store retail locations, getting attention for excess product is about location, location location. In North America, shoppers favor turning right because we drive on the right side of the road.
90% of customers will turn right when they enter your store so it’s important to place merchandise accordingly.
Placing inventory that you’re looking to liquidate to the right of the front door is a great way to ensure that many eyes see it.
If the products are currently displayed elsewhere in your store, consider relocating them to a location closer to the door. Then draw even more attention with “pick of the week” signage, or something similar. This makes the item a focal point as soon as customers enter your store, and may even lead them to question where the product is new.
Make sure that you take advantage of these extra eyes by creating beautiful displays that help your chances of converting to purchase.
2. Drop the Price
Another way to move inventory is with a good old-fashioned sale. If you’re looking to get rid of product fast, offer a deal that customers just can’t ignore. Intuit advises, “Depending on your profit margins, you may want to discount your products by anywhere from 25 to 75%, or offer a “buy one, get one free” deal to make the promotion look attractive.”
Bulk sales that require consumers to buy a certain amount of items to get one for free helps move larger volumes per sale. Bulk sales work best for items that are staples and people are likely to stock up on — like clothing basics, popular food items, and small accessories. You may also want to think about having bulk item sales around the holidays, when customers are likely to purchase multiples of the same item for gifting purposes.
3. Pop-Up Shops
You’ve likely noticed the rise in pop-up shops in the recent years. That’s because pop-up shops are an effective way to increase brand awareness, test a new market, and of course — move excess product. Perfect for retail businesses that are run exclusively online, pop-up shops are a great way to introduce your product to new customers in the retail space and get rid of inventory quickly.
Feeling a little intimidated at the idea of running your own pop-up shop? Check out our Ultimate Guide to Pop-Up Shops to help you through every step of the setup process.
Limited time pop-up shops create a sense of urgency and exclusivity for brands that aren’t normally available in store. The idea that you're not going to be around for long is a huge plus point in getting customers to buy. Scarcity drives action through customers wanting exclusive, limited edition, or other products they can't get otherwise, and a pop-up shop puts you in a perfect position to take advantage of this psychological strategy.
4. Bundles and Giveaways
Combining products together is another way to sell inventory you’re looking to liquidate. You can bundle popular products with less popular items to entice shoppers to select the bundle over the regular items, or bundle special edition items with regular items for holiday promotions.
In the same spirit as bundling, you can give away smaller products that you’re looking to move as a gift or incentive to customers. Offering a “free” product with purchases over a certain amount, say $100 or $250, encourages shoppers to stock up on regularly priced items and spend a little more than usual to receive an exclusive gift. That offloads your unwanted inventory while also increasing your average sales totals.
You can also use extra inventory as prizes in giveaways run in-store and online. Running a contest on one of your social media accounts? Offer some of those products that are just sitting around as prizes for winners.
For some tips on hosting giveaways to grow your business, check out our guide on creating viral contests.
5. Digital Marketing
Once you’ve nailed down your preferred tactic to offload those pesky extra products — whether it’s via a sale, bundling, or a giveaway — make sure you promote your efforts.
Draft up an email marketing campaign that sends info on your upcoming sale to your customers. Post beautifully styled photos of your giveaway items paired with all the details on your social media channels. And of course, ensure that your includes any sales or giveaway campaigns on your ecommerce site.
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6. Donate Remaining Inventory
No matter how successful your efforts are to liquidate all excess inventory, you’ll likely be left with a few products that need a home. Consider donating your remaining inventory to those in need. Depending on the product, you can send those unused goods to the Salvation Army, Goodwill, Big Brothers Big Sisters, or your local homeless shelter.
As well as helping others, donated items are often eligible for tax rebates. Additionally, hosting charity events is a great way to garner positive PR and brand awareness for your business.
Once you’ve cleared any surplus inventory using these strategies, you’ll be looking to the future. Ordering the right amount of product to prevent surplus inventory and minimize out-of-stock items is difficult to master.
Let us know if you’ve had any success liquidating excess inventory with any other strategies in the comments section.