Do you run a retail shop and your products are not moving off the shelf fast? If YES, here are 17 smart tips on how to liquidate retail store inventory.
For a business person, there would always come a time when you feel there is just so much inventory in your store, leaving very little space for much else. For a business, inventory is always equal to capital, and an inventory that just piles up without moving, is capital that is tied up.
Why Do Retail Store Inventory Pile Up?
Inventory pile up can come about for different reasons like slow market; buying too much stock of a certain type of merchandise and then a newer, better model comes out; over estimation of a certain market; or it is the holiday season and you need to make way for new items etc.
Why You Must Liquidate your Inventory Regularly
Whatever the case may be, one thing that is certain is that excess product is bad for business. It ties up cash flow, takes up valuable space in your store and in storage, and stale products could negatively affect conversion in store.
Customers always want to see a fresh selection in both your online and offline store on a regular basis. Seeing the same items in your store week after week would give the impression that you are losing relevance, and if people are not buying from you, then something is wrong with your products. Again, if your inventory has a short shelf life, they would start degrading right on your shelves.
You should know that cash flow is the life-blood of your business, and selling an item at a very low profit margin or even at a loss is better than it taking up shelf space. Again, your inventory should usually be sold within 90-120 days. If items haven’t moved in this amount of time, then it’s time to get rid of them.
If you find yourself piled high on inventory and short on profits—whether from overbuying, expanding lines too quickly, or overestimating sales, don’t panic, you still can whip your inventory back into shape before it puts you out of business. What you need to do is find ways to quickly liquidate the inventory in your store.
If you have come to the realization that you need to liquidate inventory fast in your store, here are some ways to do just that.
17 Smart Tips on How to Liquidate Retail Store Inventory Fast
- Step down on ordering
Stores always want to have the latest items in stock, but you have to apply the brakes if you notice that your store is still full of old stuff that are yet to make it to your customers. You may have to cancel or cut back on the orders that don’t presently represent a critical need.
This does not mean that you would not make any orders, it just means that you need to be more selective now. Ask yourself if you can delay adding a new line for three or four months. In addition, you should cut out marginal items, and delay introducing those new items.
If some of your suppliers would not allow you to cancel your order, you can explain to them that by protecting your financial stability today, you’ll be better equipped to make future orders. There are chances that they will be more likely to make concessions if they think it will keep you as a stable customer.
- Hold a price slash
Slashing prices is one strategy retailers resort to when they want to move products fast from their stores and shelves. Depending on your profit margins, you may want to discount your products by anywhere from 25 to 75 percent, or offer a “buy one, get one free” deal to make the promotion look attractive.
Sales come in various types, and you can utilize them depending on your situation
- Clearance sales: This is an opportunity to flush out any stock that hasn’t sold in the past 3-6 months. You typically set this up to clean out majority of your inventory. Extensive promotion is the key to success for your clearance sales.
- Flash Sale: this is a type of sale that comes up just once in a long while and it is usually unpredictable. Urgency and the fear of missing out have a serious psychological effect on consumers which makes flash sales a great way to convert some good sales
- Specific Items Sale: If you find that your sales aren’t yielding the results you’ve anticipated, try narrowing the focus. Put on a sale that is aimed at a particular type of shopper, product, or need.
- Seasonal Sales: A change in the season may mean that your product line is changing as well. This is a great time to market to the bargain hunters who are actively looking for deals. This will help you to make room for seasonal stock on your site.
You need not wait for customers to come in to take advantage of the special offer that is available in your store. You should be proactive and market your offer on your business’ website, Facebook page, email newsletters, and other marketing vehicles.
Bulk sales work best for items that are staples which 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.
While sales are a great way to drive shoppers to purchase, it’s important to keep the frequency of sales in mind. If you have too many sales throughout the year, they may lose their appeal and effectiveness.
- Convert less popular items into gifts
There are certain items that refuse to move no matter what you do. You can still put those items to good use to move your inventory fast. The idea is to name them as gifts given for purchasing certain other weightier items. You have to make sure that such gifts are useful in some way to the majority of people, so it can provide enough incentive to buy.
To ensure you don’t throw away the product to smart shoppers who would pick up one small item in order to claim the gift, you could offer the surplus product as a free gift for customers who spend more than a certain amount in your store.
Threshold offers like “Spend $70 or more and receive a free coffee mug!” can help you get more out of each sale while also getting rid of those old coffee mugs that are collecting dust.
- Move things around
Smart shoppers typically know where the discount items are and would always make a beeline there. To take advantage of this to liquidate your store fast, you should endavour to move all items you want to place on sale to that location. You may also want to place a number of “bargain bins” throughout the store, so you’ll be able to pick up some impulse buyers as well.
Watch customer traffic patterns for a couple of days. If you find one section of your store being visited more frequently than another, do some rearranging. Shift your high-draw merchandise to another part of the store.
- Go online
Online marketplaces like Ebay and Amazon are very ideal ways one can sell off excess merchandise fast. You can either use an auction model, in which you can set the lowest price that you’re willing to accept for the item, or use a set pricing structure. Online marketplaces offer access to a broad network of customers, but have much heavier competition than selling locally.
If you have your hands full with what is going on in your offline store, you may have to consider hiring an inter to man the online store for you as you will be getting quite a lot of engagements if you launch out in the right way. If you don’t want to do the work in-house, consider using an online auction service company to handle your sales; however, you’re likely to lose a substantial amount in commission fees.
- Utilize the services of a liquidation company
A liquidation company is a company that helps businesses get rid of their stuff. This company can help you move your extra stock as quickly as possible with minimal effort. You may lose out on some potential profits, but you’ll be able to clear the space quickly and receive cash immediately. Particularly if your brand is high-end, you may want to use this method to avoid damaging your brand name by offering deep discounts.
- Set up pop-up shops
There has been a sharp rise in the incidence of pop-up shops in a few years. This is because these shops are an effective way to increase brand awareness, test a new market, and of course — move excess product. They are equally great for for retail businesses that are run exclusively online. You can utilize your pop-up shops to introduce your inventory to a new market and as such help you make rapid sales.
The limited time that pop-up shops have after they are set up create a sense of urgency and exclusivity for brands that aren’t normally available in store. 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.
- Learn to bundle products
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.
Seeing that customers naturally gravitate toward new merchandise, you can take advantage of that tendency by pairing your older merchandise with your new arrivals. Price the older items near or at their cost price; remember the idea is to get cash quickly. With every dollar you add as markup, you move away from that goal.
If you’re sitting on a bunch of excess stock, make those particular items more attractive by offering a bundle of multiple units at a discounted price. This way, every sale will be of higher dollar amount and flush more units of stale inventory.
This is a great way to move the popular items with the unpopular ones. This offloads your unwanted inventory while also increasing your average sales totals.
- Run contests
People love to enter for contests as long as there are items to be won. Setting up a contest in your store is one way to increase popularity for your business and in turn increase your sales, especially if people have to qualify for the contests by spending a certain amount of money in your store.
You can use your extra inventory as prizes in the giveaways that you run in your offline and online stores. If you are running a contest on one of your social media accounts, you can just offer some of those products that are just sitting around as prizes for winners.
- Promote your promos
If you have decided to hold sales or promos to help liquidate inventory in your store, you have to market the promo, if not you will be right back where you started. You can daft 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 you include any sales or giveaway campaigns on your ecommerce site.
- Slash Internal merchandise Processing Time
Sometimes stores take too much time to bring their merchandise to the shelf. You should know that the quicker your merchandise hits the shelf, the quicker it gets sold. Look for jams in your processing system that may be unnecessarily tying up merchandise and work them out. Work together with your staff to find ways to cut your processing time by 50 percent or more.
- Sell to fellow retailers
If you know a retailer in another community who can use some of your overstock, make them an offer. In order to make this work, you’ll have to offer them either quicker delivery than they can get from a supplier, a lower price or both.
But if they pay you in cash, you’ll come out ahead with your problem solved. This strategy is quite good if you can pull it off as it would enable you move a lot of inventory at the same time. To maximize this strategy, you have to make sure that you sell outside of your trade area. If you sell to a nearby retailer, you’ll be trading wholesale sales for retail sales.
- Up the stakes for your sales people
You may have had sales people all these while, but now is the time to give your salespeople strong incentives to sell both basic merchandise and add-on items. Set up a contest running two to four weeks, and offer prizes for categories such as: highest total sales, highest sales per hour, highest average sale, highest single sale, most items on a single sale, highest sales in one day, highest sales in one week and largest increase over the previous period. Above all, make the contests fun.
- Remarket and Reposition
Products may not be selling because of how they have been marketed. You may have to add some freshness and newness to your product arrangement or appearance. You can do this by taking new photographs of your products if you are selling online.
Product photography is incredibly important and it also can be quite difficult to get right every time. Give your products a fresh look with new product photos. Make sure the images are high quality, show the item from multiple angles, and maybe throw in a lifestyle shot to play on emotion. Sometimes you just need to freshen up the product marketing to get these items to sell.
- Contact Suppliers to see if they would agree to a return
While this may be a shot in the dark, but asking suppliers if you can return inventory back to them can never hurt, at worst you will get a no, and at best you will get a yes. You can plead your cause by giving reasons like; the product was wrong for your market; the inventory is packaged and undamaged; and the supplier wants to keep you as a customer for the future.
- Donate Remaining Inventory
No matter how successful your efforts are to liquidate all excess inventory, you will 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. Let’s face it, if you can’t find a way to sell old inventory, then donating it may be your best option. There are plenty of organizations that are willing to accept donations and your business can benefit from helping others.
As long as one is a retailer, the phenomenon of excess inventory will certainly crop up every once in a while. Instead of bemoaning your fate, the best practice is to find ways to turn your redundant inventory into cash. The various tactics listed above should provide you with some creative ways to clear your shelf space and pile up some revenue in the process.
To avoid the problem of inventory pileup in the future, you should consider using inventory management software to keep better track of your goods. Fishbowl Inventory is the best-selling inventory solution for small business that integrates easily with QuickBooks.