Excess stock, dead stock, obsolete inventory….call it what you like but for many companies it represents a problem. It could have been superseded, it could be excess to requirements, and it could be at the end of its product life. The fact is it hasn’t sold and could represent a significant loss to the company if it has to be written down or even written off. Questions about demand forecasting and sales efficiency will be asked.
Holding on to obsolete inventory hoping to sell it in the following year at full price could potentially harm your productivity, keep you from ordering new merchandise, and also prevent you from earning good profits. As much as a company may want to tuck away obsolete stock in a warehouse, the surplus can result in large costs. The loss of working cash, holding costs, and the costs of the products are some of the ways excess inventory can eat away the bottom-line profits. The magnitude of the problems associated with such inventory warrants immediate attention.
Identify the Excess Inventory
Although almost every industry has dead inventory, sometimes it can be a challenge to identify it. Causes of the obsolete stock can result from a new competitor, branch closure, end of a product lifecycle, loss of a supplier/client, or an internal consolidation.
Inventory must be prioritized by age, investment value, shelf life, and turnover. After identifying obsolete inventory, be sure to use a product forecast to determine the supply needed to complete immediate orders. With obsolete stock, a company must look for ways to recoup much of the cost.
Sell Online
You can choose to remarket your products on a number of different consumer based sites, but the process can be time-consuming, especially dealing with consumers for a business based product. The best option is to join an e-commerce site marketplace such as Industrial Clearance. This is a smart way to benefit from overstock, build your brand, and clear out unnecessary stock to avoid storage costs and the display of products already out of the market in your store. Industrial Clearance specialises in Industrial products only.
Remember, your warehouse of inventory gives Banks clues in regards to your operations efficiency and financial health. With obsolete inventory, accessing funds for additional stock may be impossible. We offer businesses a leading sales channel where they can move their overstocks, obsolete and slow moving supplies.
If you have obsolete stock or excess inventory, check out our Sellers Program here.