Dead stock, or inventory that isn't moving, can be a major problem for businesses of all sizes. Not only does it tie up valuable resources, such as space and money, but it also means lost opportunities for sales and revenue. In this blog, we will explore various strategies and tactics for turning dead stock into sales, so you can make the most of your inventory and grow your business. From pricing strategies to marketing techniques, we'll cover it all to help you make the most of your dead inventory.
What is Dead Stock?
Dead stock means unsold products that have been sitting in your warehouse or store for an extended period of time. Dead stock is harmful to any business since it not only consumes precious space but also represents a poor investment for your company. The money spent on purchasing things from your vendor can only be repaid when they are sold, therefore unsold stock equals lost money.
Methods to Convert Dead Stock Inventory into Sales
Some of the methods are as follows:
Here are some of the most effective sales techniques:
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Clearance sales: These are basically sales of surplus goods. Customers, on the other hand, see them as a terrific opportunity to receive significant discounts on things they may not have seen or been able to purchase previously. These can be run a few times during the year.
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Seasonal: Certain things sell better at certain periods of the year. A ski shop, for example, is likely to see a drop in sales in April, which is all the more incentive to host a seasonal sale. Hosting a sale is an excellent strategy to prevent accumulating surplus inventory during quiet months.
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Flash sales: These kinds of sales have a psychological impact. Notify your consumers by email, mail, store signage, or any other marketing channel that you will be having a one-day-only offer. Customers will sense the urgency and arrive prepared to spend on reduced items.
Regularly offering discounts is an excellent method to keep consumers coming in and purchasing inventory that is about to go out of season. This is also near the end of its product life cycle. This method may not work for really high-end items with small margins, but it is a fantastic way to ensure you get something for inventory that is in danger of depreciation.
Also Read: What is Safety Stock? Definition, Formula, Different Methods
Provide a Complimentary Gift to Consumers
When you offer things, giving buyers a free gift boosts the order value and provides customers with an incentive to buy from you. You may also surprise (and please!) consumers with a freebie. This will generate a great client experience and increase the likelihood that they will purchase from you again. This may be an excellent marketing approach whether you provide prices with purchase incentives or go the surprise route. It provides an additional incentive to purchase and, as a result, should increase your conversion rates.
Return Dead Stock to the Vendor
Returning things to a supplier is a simple approach with a small advantage. If a supplier accepts returns, it will typically not issue a complete refund and may even charge a restocking fee. Your company is also liable for any shipping fees to return the items. Some vendors provide credit refunds, which are only beneficial if you intend to continue buying their items. If a return is the most appropriate option, ensure that it is processed as soon as possible and that the items are sent back in their original packaging.
Sell as a Set of Products
Bundling items can increase the perceived value of orders. Dead stock may be positioned as valuable by grouping it with popular products. Customers will be delighted to purchase more things at a reduced total cost. This necessitates a reduction in profit margins. On the plus side, you'll be able to clear out your dead stock. Try to unite goods with the same theme when bundling dead stock. This increases the perceived worth of packaged products and allows customers to sell quickly.
Look for Partnership Possibilities
Collaboration is another method for converting dead stock inventory into sales. If you are unable to sell dead products, collaborate with other retail establishments. This is where you may use your current relationships with other shops to your benefit. You may collaborate with them to develop a plan for moving dead stock profitably. By collaborating, retailers may transform dead stock into valuable inventory. You may accomplish this by hosting a co-sponsored seasonal sale or developing a co-branded product package.
Also Read: All you Need to Know About Set Up a Partnership Firm in India
Donate Your Unsold Inventory
While donating things to charity does not compensate for lost revenue, it is part of your company's social obligation (CSR). This can help your business in other ways, as recent research shows that firms that engage in CSR activities can attract consumers. In addition, they can establish a platform to promote and earn their audience's attention. Another alternative is to keep selling the items and donate all or a portion of the proceeds to charity. Charitable contributions can also be used as tax write-offs or deductions, and many corporations may choose to develop long-term relationships with a charity.
Re-Merchandise or Refresh
Sometimes the reason your things aren't selling isn't the merchandise itself, but the way it's presented. The way you place inventory in your multi-store chain business might affect sales. As a result, you must try to reposition things to see whether the problem is due to stock or inadequate marketing. You should experiment with different shelf configurations or stock locations in your business. Using innovative price tags is another method of remerchandising. You may also use eye-catching signs or highlight the benefits of the product to make it more enticing to buyers.
Think About Liquidation
Many organisations use liquidation as a method of managing dead stock inventory. Retailers sell their excess inventory to companies that specialise in selling such things. They will purchase your things at a lesser cost than you paid. So, while earnings are uncertain, this will allow you to free up inventory space.
Also Read: Stock Management: How to Manage Your Inventory
Conclusion
Deadstock negatively impacts a company's overall performance by consuming investment and taking up space. Keeping dead stock for an extended period of time reduces the profit margin. Invest in inventory tracking equipment if you don't know how to eliminate dead stock. This allows you to maintain track of your inventory, identify slow-moving goods, and get rid of dead stock as soon as possible.
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