Author: industrial

A business’s life force is their ability to get products to their customers on time, all the time. An essential part of this equation is effective inventory management. We’ve assembled the top tips on how to manage your inventory like a pro.

Why Inventory Management Is Important

The supply chain is the network between a company and their suppliers, which assists the company in producing stock for their customers. Inventory management is the purchasing, storage, use and selling of stock, as well as all the processes within these four aspects. Inventory management is therefore essential in your supply chain as it maintains a balance between supply and demand.

Managing your inventory ineffectively can lead to lack of stock, excess stock or lost and damaged stock, which cannot be sold. Any issues with stock will affect your supply chain, therefore it’s important that your inventory is accurate and up to date at all times. Coordinated inventory management processes streamline inventory data to assist in key supply chain decisions.

Tips For Managing Inventory

Track and review your sales to see which products have a higher demand and when. Invest in inventory management software that updates inventory logs at the point of sale. Ensure there is a seamless flow of information between the demand management functions of the company, such as marketing, and operational functions of the company, such as manufacturing, to assist with planning for future inventory needs. This can be done by implementing sales and operations planning (S&OP) processes.

We at Industrial Clearance understand the trials and tribulations of inventory management and we hope this article has been informative in helping you manage your inventory, to keep processes within your supply chain running smoothly. Let us take a load off your back by selling your excess stock through Industrial Clearance today.

A business’s life force is their ability to get products to their customers on time, all the time. An essential part of this equation is effective inventory management. We’ve assembled the top tips on how to manage your inventory like a pro.

Inconsistent Inventory Tracking

Gone are the days of paper, filing, and hard-copy invoices. Invest in a centralised inventory tracking software with automated features to improve data capture, analytics, and inventory tracking as well as reordering. This will help you avoid over and under stocking. Audit your stock frequently. Have safety stock to prevent understocking anything. Consider a cloud-based inventory management platform so you can track inventory anytime, from anywhere.

Ineffective Communication 

Information flow within the business needs to be smooth, consistent, and transparent in order to identify inventory trends and find ways to improve. Track and report warehouse and employee performance throughout the business and with your suppliers. Run a transparent house within the business and with customers and make communication a key element of the way you operate.

Lack Of Performance Parameters 

Stock turnover, problem stock, and other performance indicators should be monitored. Inventory forecasting software can be used to predict customer demand. Problems, trends, and strong points must be observed and considered to improve effectiveness.

Poor Warehouse Processes 

Receiving, picking, packing, and shipping of stock needs to flow seamlessly for your business to run efficiently. Plan and organise your warehouses and classify your inventory carefully. Perishable and fragile stock have specific care and storage requirements while high value stock requires loss-prevention strategies. Make sure there are clear definitions between these.

Lack Of Expertise And Inconsistent Work

Ensure you have a team of employees you can trust to run their operations to a sufficient standard. Hire warehouse managers that are familiar with what it takes to manage the warehouse effectively. Measure your suppliers’ performance and ensure they run a ship as tight as your own. Outsource to an inventory management specialist, if need be, train your employees, and provide online support in regard to best practices.

There is a myriad of problems that a business can face in terms of inventory management. One of the most beneficial ways to manage your excess inventory is to let Industrial Clearance stock and sell it for you. We have a host of interested and engaged buyers waiting for your stock to hit our “shelves”. Contact Industrial Clearance today to find out how our inventory management solutions work.

Inventory management is one of the most challenging aspects of running a business. Too little and you lose out on business, too much and you end up with less profit. Regardless of the size of your business and your processes, you may find yourself dealing with excess inventory at one point or the other. What causes excess inventory and what are the consequences?

There are several factors that can contribute to excess inventory or overstocking. Poor inventory management is only a part of it. Here, we will discuss three major causes and three major consequences of excess inventory.

Three Major Causes of Excess Inventory

The primary causes of excess inventory include but are not limited to the following:

Misjudged Customer Demand

Demand is arguably the most important factor to consider when you are stocking your warehouse. When you stock according to demand, it is almost impossible to experience overstocking. However, it is easy to misjudge customer demand and overstock your facility when you are always planning well in advance.

Fear of “Out-Of-Stock

You can lose money and customers when you run out of stock. Many business owners and managers fear the scenario for obvious reasons, most importantly having their customers go to their competitors. Letting fear influence your decision-making process can land you with excess inventory, which is just as big a problem as running out of stock.

Poor Marketing Strategy

It is possible to have the right inventory at one point and see it become excess inventory with time. Poor marketing will leave more products on the shelves, and with time, they will become excess inventory.

Three Major Consequences of Excess Inventory

Excess inventory can affect your business in many ways, but here are some of the most critical consequences:

Increased Carrying Costs

Carrying costs include all costs that are associated with storing inventory, including capital costs, storage space costs, service costs, and inventory risk costs. Some of these costs are not obvious when running a smooth operation. Once you have overstocked items, these costs increase at a remarkably high rate.

Product Degradation and Expiration

When you have too much stock, products on your shelves will begin to deteriorate. If you do not devise measures to get rid of your surplus or old stock, they can expire or perish. Degradation leads to poor quality products, and they command less value. Expired products become liabilities and may cost you a lot of money to get rid of.

Tied-Up Cash and Associated Losses

Too much inventory also means that your cash is tied up on the products on the shelves. There is no way to recover the investment until you sell the overstock. This scenario results in different kinds of economic losses. You can sell your excess inventory on Industrial Clearance for a reduced rate of what it was initially worth. We attract quality buyers who would be more than willing to take your overstock items off your hands.

For more information on how to avoid or manage excess inventory, contact us and we will be happy to help.

Depending on the nature of your business, inventory management can be among the major determinants of your success. In fact, effective inventory management is critical to success. Understocking and overstocking items happens all too frequently, creating issues on both ends of the spectrum.

Establishing an effective inventory management process can be a large undertaking to start with, but the setup is worth the effort. It is all about finding the best system to track inventory and stock quantities in and out of your warehouse or business premises. You need to take a good look at your supply chain and how you can make changes that will bring overall improvement.

Here are a few of the more common tips that can assist with improving your inventory management:

Have Multiple Suppliers

Vendor management is a sub-category of inventory management. Let’s say you have a highly sought-after item; having a substitute vendor as a backup is definitely a good idea. In the instances that you can’t find stock from your primary supplier, you can call on your backup to assist without letting customers down.

Create An Inventory Management Plan and Stick To It

Effective inventory management is a strategic process that requires a strong foundation involving all departments within your business. By having a well-laid-out plan and following it, every aspect of your supply chain will improve, and your other business operations can run smoothly. Start by doing the following:

1. Prioritise your inventory to understand your best sellers, big stock items, and those that move a bit slower and need less attention
2. Catalogue and track all product information, keeping it all in one convenient location
3. Do regular audits on your inventory
4. Keep tabs on the performance of your suppliers
5. Create a system for the way that you receive and process your stock
6. Track sales and orders yourself

All of this can be done using inventory management software, or you can develop a system of your own using spreadsheets, some foresight, and planning.

Keep Track Of All Product Details

As mentioned above, ensure that you keep proper tabs on every product in your inventory. Depending on the type of products you deal with, there will be different pieces of relevant information. Things like SKUs, barcodes, dimensions, variants, supplier information, etc. You should have a consistent overview of the varying prices of products to be aware of factors that may affect the price, such as scarcity, supply, and demand, etc.

Examine The Performance Of Your Suppliers

An unreliable supplier can wreak havoc on your inventory management and business processes. Suppose you have a supplier who is consistently late with deliveries or under-delivers on orders. In cases such as this, it’s best to discuss the concerns with your provider, determine the source of the problem, and be ready to switch suppliers if the inconsistency persists.

Create a Bond with Your Vendors

A positive relationship with your vendors is critical to the success of your business. Your suppliers are an essential part of your business that keeps your customers happy. Build strong relationships with your suppliers and develop a system of trust. Not only will this make business more enjoyable, but it can help if you need to call on them in a pinch. You might find that when they have new products coming to market that you’ll be one of the first to know.

Final Words

Creating an effective inventory management is an integral part of business success and we believe the tips above will help you achieve it.

Where you have severe issues with overstock, Industrial Clearance is here to help. We will publish your overstock items on our platform, which is available to several high-calibre, serious buyers who are always on the lookout for a good deal.

Contact us here to discuss further.

Excess inventory includes all products that are not being used and are not likely to be used in the near future. Also called overstock, excess inventory can be caused by factors like inaccurate forecasting or predictions, poor inventory management systems, unreliable vendors, lengthy lead times, demand variability, and other reasons.

Regardless of the cause, it is important to get rid of excess inventory as soon as possible. Unfortunately, some businesses and business managers do not understand why it is so important to get rid of their overstock.

Major Reasons You Should Get Rid of Excess Inventory Fast

Getting rid of excess inventory is an important business process that can yield many benefits. Here, we will briefly summarise some of the more critical reasons to get rid of your excess inventory:

Increase In Carrying Costs 

Carrying costs include all costs associated with storing inventory in your warehouse, including capital costs, storage space costs, service costs, and inventory risk costs. These costs will easily add up when you have excess inventory and fail to get rid of it. The longer you keep your overstock, the bigger the financial burden it will bring to your business.

Loss Of Profit

Excess inventory depletes your profit potential in many ways. In addition to increasing the overall cost of the product, holding onto stock for longer lowers the prices of the products as they get older. The longer the stock stays, the lower your profit margin. It can even get to a point that you will incur losses just to get the products out of your warehouse or store.

Expired Stock

Excess inventory ultimately turns to expired stock when it is not removed in time. A product that is fast approaching its expiry date will lose value and become harder to sell. When an overstock expires, the value is completely lost, and you will likely incur more loss just to get rid of the expired products. Even when an inventory item doesn’t expire, it can become obsolete and useless to buyers, resulting in losses.

Lower Storage Capacity

Excess inventory occupies precious space that can be used to store new and more valuable stocks. By leaving your excess inventory for too long, you are directly lowering your storage capacity for valuable and necessary inventory. You may be forced to invest in extra storage space, which would be otherwise unnecessary if you moved your overstock.

Get Rid of Excess Inventory the Smart Way

There are different ways to get rid of excess inventory. You can reduce the price of the product. You can also run giveaway campaigns or donate your overstock for tax deductions. But we believe that unloading your excess inventory in bulk to an industrial clearance company is the smartest way to recoup the cost and even make some profit.

Industrial Clearance can help you prevent all the possible losses associated with excess inventory in Australia. All you need to do is take the right action at the right time. Contact us to learn more.

Many industrial businesses might find themselves in a position where they are sitting with excess stock. There are many reasons for this. During COVID-19 overstocking certain non-essential items, poor purchasing decisions, or even simply poor uptake might have led to these instances. While it can be avoided during planning and purchasing stages, once left with surplus inventory, the trick is getting rid of it.

Here are seven proven ways to get rid of surplus inventory or old, excess stock.

1. Refresh, Remarket or Remerchandise

Sometimes old stock needs a little makeover to help it shine again. Often a different marketing approach will help move product, or simply refreshing packaging and remerchandising it will help it appeal to your market more effectively. Position surplus inventory towards the front of your store to place more focus on it or rethink your marketing campaigns and target audience.

2. Put Surplus Inventory on Sale

Look at your numbers and knock the price of old stock back a bit to help it move a little quicker. Be reasonable in this approach as you still need to make a profit or at least cover the cost of the product. Run a flash sale to help spur customers into action with a little bit of urgency to fuel their actions.

3. Create Discounted Product Bundles

Discounted product bundles work really well for creating a better sense of value for money. Next to discounting, bundling is the most popular means of moving merchandise. Combine bundling and discounting, and you have a recipe for success. Combine products that have relevance to one another to make the offer even more attractive.

4. Use Low-Price Old Stock as Free Gifts

Take a look at your lower priced old stock and give it away as a free gift when customers make another more substantial purchase. This also creates a better sense of value. You could even position it as a buy two, get one free or something similar.

5. Make Use of Online Marketplaces

Industrial Clearance is your support structure in this instance if you have surplus inventory in the industrial sector. We will host and sell your industrial stock on our online marketplace offering the lowest prices for our customers, but still enough of a deal for you to turn a profit. Other industries have similar online marketplaces that can be used.

6. Liquidate

If you are desperate to move your surplus inventory, and there is substantial money involved, consider liquidation. Sell your stock to merchants who make it their business to take on old or excess stock in these situations. They might want to make personal selections from your range.

7. Make Donations for Tax Benefits

Last but not least, donate your excess stock and take advantage of tax benefits. This is a win-win option as you will be assisting a charity and you can enjoy tax deductions at the same time.

One last reminder, where industrial clearances on surplus inventory are concerned, get in contact with us and we will give you the best price on your old stock.

Stock turnover, stock turn, and inventory turns are all other ways to describe inventory turnover. It’s the movement of stock over a certain period of time that is calculated by dividing the cost of goods sold by the average inventory. When inventory is not being sold it is incurring storage costs and is also not bringing in any income.

The inventory turnover ratio measures the performance of your business and your products. These insights can be used to prevent financial issues arising while increasing profitability.

High turnover indicates a positive business flow, whereas lower turnover indicates that there could be some issues that need to be examined. So, how do you optimise inventory turnover to deliver the best for your business?

Optimise Supply Chain Processing

Streamlining your supply chain can help reduce the kinks, delays, and costs so as to improve profitability and delivery. Optimise your factory or warehouse space to complement your fastest moving inventory. Inventory with the fastest turnover rate should be placed in the most favourable position for easy access and quick movement. Products with lower turnover rate can be moved further back to ensure that movement and flow is as effective as possible where it needs to be.

Evaluate Product Pricing To Improve Inventory Turnover

Review your business pricing strategy to ensure that you’re offering the best possible prices for optimal inventory turnover and profitability. Dropping prices in an attempt to garner more sales can sometimes have the opposite intended effect. People expect to pay more for premium quality and offering these products at a reduced cost can be an indication of lower quality, even when it’s not.

Explore wholesale pricing strategies to ensure you’re offering the best value for your products, while also having enough room for profit.

Focus On Best-Selling Products

Your best-selling products should get more of your focus in order to move as much inventory as possible. Review inventory reports to ascertain which products experience heightened inventory turnover and which are at the opposite end of the spectrum. Remove the lowest performing inventory to improve the overall inventory turnover for your entire business.

Eliminate Excess Or Obsolete Inventory

For slow moving or obsolete stock, there is an alternative solution. Upload and sell your overstock, slow moving stock, superseded and obsolete items online. Not only will you be able to clear the stock, but you can also prevent complete financial loss on those products.

Industrial Clearance offers you a unique marketplace whereby your obsolete products can still be moved at a nominal cost. Customers will have access to the most competitive prices available for these products, and you’ll have a clear line of sale that won’t impede with the rest of your inventory.

We engage in a strict vetting process before taking on any stock, which means that we only work with quality suppliers. This in turn attracts quality buyers, ensuring that you’ll get your money’s worth for stock that would otherwise be classified as redundant.

Sign up for an account today and get going on clearing your obsolete stock and optimising inventory turnover.

Excess or obsolete inventory is a common problem for distribution businesses that can run costs of up to 25% per year. Regardless of the industry or sector, most businesses will have to deal with obsolete inventory at one point or another.

The amount of inventory a business holds affects almost every aspect of its operation. Obsolete inventory also affects the valuation of the business as banks carefully examine inventory when considering working capital lending. The way that inventory is disposed of can also have an impact on the business in different ways. To assist you in managing your excess inventory effectively, here are our recommended five steps to dispose of obsolete inventory. 

Use The Inventory As It Is

If you have inventory produced for a particular customer/business that is no longer interested in using it, then it’s possible you can use it the way it is for a similar client. You may have to contact the initial customer to explore settlement options. Once you have another customer interested in the inventory, then you can pass it on as it is.

Modify The Merchandise

There are ways to modify or rework inventory that is classified as obsolete to make it saleable again. If the quality of the product has not been compromised, you can work with your principal supplier or other partners to reconfigure the product to the latest version and correct price. However, you need to ensure that the cost of modification will not make the venture unprofitable.

Sell At a Discount

Sometimes, you may have to slash your prices to get rid of inventory that is on the verge of being classified as excess or obsolete. You can offer inventory that is not selling fast at a discount price to avoid complete loss, even if the quality is intact. For inventory that is already classified as obsolete, recouping 25% of the original value in cash will at least provide you with some return.

Use Valuable Components

If you are dealing with assembled products, you can disassemble, reuse, or sell the valuable parts as spares or essential parts for other products. You can take apart most assembled or sub-assembled products and salvage as much value from it as possible. The value of the parts may only be fractions of the product’s original cost, but as with the previous point, it still provides some level of return.

Donate The Inventory

Donating your excess inventory is another way to get rid of it without incurring an excessive loss, while also ensuring it is put to proper use. There are many charity and not-for-profit organisations that will gladly accept your excess or obsolete inventory. This will help you avoid the cost of scrapping the inventory. In addition to doing a good deed, you will receive a tax credit for your donation.

Minimise Excess And Obsolete Inventory

The best way to handle obsolete inventory is to avoid amassing it in the first place. If this accumulation of obsolete inventory write-offs is a common occurrence, you may consider assigning the disposition and prevention responsibility to a specific team.

Industrial Clearance provides businesses with the means off sell obsolete inventory.  Check out the website here or please feel free to contact us for professional help right away.

Until recently, most businesses had fixed arrangements with logistic service providers that relied on ld-fashioned metrics and ordering techniques. Freight routes, shipping costs, warehousing – these values were fixed and inflexible.

But with big data and the internet, it’s now possible to be more creative about how goods are handled. Companies look for opportunities to do merge-in-transit and diverting of goods to save time and warehousing costs.

In fact, a 2016 PwC report predicts that as warehousing solutions become more sophisticated, logistics service providers will become more IT-oriented. Technology suppliers may offer logistics services based on their own expertise, whether that be using drones, robotics or automatic routing.

Here’s how the cost of freight and storage can be minimised by establishing special relationships with logistic service providers.

The cost of transporting goods

Whenever you send out an item to a customer, you are incurring an expense that drives up cost. It can either be included as a separate freight charge or included in the cost of goods sold (COGS). Either way, it drives up the cost and makes your stock less competitive.

According to an IDC report, transportation and logistic service providers costs as a percentage of sales range from 9% to 14% depending on the business. To reduce these costs, alliances between logistic services and businesses are becoming commonplace.

Strategic transport alliances

These alliances are strategic relationships, not just relationships born out of habit. The parties in a typical agreement are:

• A logistic service provider
• A producer of goods

Together they design a system that gets products to customers reliably, quickly and cheaply.

With the decline of locally manufactured products, logistic service providers are now becoming more important in the supply chain. Customers now expect to be able to buy a laptop from Shanghai with the same ease as going down to their local computer store.

To make this possible, logistic service providers bring to the table solid relationships with customs officials, both at home and in the country of manufacture. Supply bottlenecks become a thing of the past.

Alternative outlets for excess stock

The same costs apply if you have to move excess or unwanted stock to an auction centre or discount warehouse in an effort to offload it. So instead of moving excess stock around looking for buyers, why not let the buyers find you?

This can also be done through Industrial Clearance. Stock is listed on the site and once it’s sold through the website, goes out directly to the customer.

In this way, retailers have an additional way of moving stock that minimises breakages, delivery times and lack of availability.

In the same way alliances are built with logistic service providers, building a relationship with an alternative outlet for stock can be beneficial for business owners.