Excess or slow-moving stock can be a huge headache for online sellers.
Often this occurs at the beginning of the year after the crazy Christmas period or at the end of seasons when new products come into demand.
Not only does this mean valuable space in your warehouse is unavailable, but it can mess up your cash flow, and attempting to sell it can divert your attention away from other vital areas of the business.
Here are the best strategies for inventory reduction so you can spend less time worrying and more time focusing on what really matters.
If shoppers see you advertising a sale every week, they’re likely to lose their appeal and effectiveness.
So, choosing the right sale and the right time are important factors for maximizing your conversion rate.
There are several different types of sale you could push depending on the stock you’re trying to sell and the time of year.
For example, if you have large quantities of old stock that hasn’t sold in the last 6 months, a clearance sale could be a good option.
Slash your prices and shout about your clearance sale on your website, socials and send out a personalized email.
Use the data you have on your customers to tailor your communication to them e.g. previous orders, name, sizes etc.
It’s simple really...
If you receive an email alert of a clearance sale featuring a dress in your size, similar to what you have bought in the past, you’re more likely to buy than a product not specific to you at all.
Flash sales are great for creating a sense of urgency among your customers.
Notify your shoppers of a limited time offer and build the anticipation with a series of drip emails and hype on social media.
Consider which products would be best to promote in this way.
You must align your flash sale with what your target audience want.
In other words, you need to put a discount on the products that are going to encourage the right people to click on your site.
The end of a season is often a time when online sellers find themselves with excess stock that didn’t sell.
Before you focus all your marketing on your new season stock, make sure to have an end of season sale to minimize the amount of leftover inventory.
Another reason you might find yourself with excess, slow-moving stock, is that you’ve just missed the boat with the time of year your product is seasonally in demand.
In this case, a seasonal offer or discount code could help convert these products when the time comes around again.
Lastly, sales on specific items can really increase your conversions.
Often people are put off by the chaos of a mass sale.
By focusing on one particular product or product range, your audience are funneled towards the discounts you want them to find.
For example, if they’re browsing on your site and see you’re running a special offer on trainers, this could be more tempting than sieving through pages of different sale items.
Removing too many options / barriers and providing a focus to your shoppers, could really work in your favor.
Bundle stock together.
Creating product bundles is a great way to shift multiple products in one sale while still maintaining your profit margins.
By bundling your slow-moving products in with your fast-moving products, you’ll be capitalizing on the popularity of other items.
Online shoppers looking to purchase your top-selling items will view a product bundle as an attractive bargain and be more inclined to buy as they’d be getting additional products to what they initially set out to find.
This is also an opportunity to jump on key gift-giving dates like Mother’s Day and offer your bundle in the form of a beautiful gift-set.
Consider pairing high margin products with low margin products so you can attach a more enticing price to your bundle or gift-set too.
If you have a lot of the same product taking up space in your warehouse, consider offering these as wholesale.
Lastly, always have the customer in mind…
If you’re struggling to sell a particular product, you could bundle complementary products and sell as a more attractive package deal.
Let’s say a certain flavor of protein powder isn’t selling well, you could bundle this with a shaker bottle and vitamin supplement to make for a more enticing offer to your customers.
Cross-sell and up-sell.
Cross-selling is a great way to promote slow-moving products that are either similar to a more popular product or would complement it well.
Used in the right way and shown at the right time, cross-selling can be really effective.
A giveaway or a competition is a great way to create new buzz around your excess stock and improve customer demand for it.
This inventory reduction strategy also serves as a fantastic brand awareness and lead generation opportunity.
You just need to use it to your advantage…
Set the competition rules to benefit your sales funnel.
You could gather more contacts with an email capture or build your social media following by having to follow you and retweet the competition post.
Giveaways and competitions are only successful if you can get enough exposure.
You need to have a clear strategy in place before you start running one.
What graphics or videos will you use to promote the competition?
How will you let new and existing customers know about the competition?
Make sure to utilize your email list, website popups, social media channels and connections with any relevant influencers to help extend your reach.
If the excess stock you have alone isn’t appealing enough to run a competition around, consider giving away as a bundle along with more desirable products.
Work with influencers.
Depending on your product and industry, working with the right influencers can really reignite interest in your slow-moving stock.
Send excess stock to key people in your space who have the voice and the followers to reach your target market.
In return, ask for a review or a post on your product.
Endorsement and advertising from an influencer can be all it takes to send an influx of traffic to your product page and see a surge in sales.
They have the platform and the means to speak directly to your potential customers, so use them wisely.
Building up a relationship with these influencers over time will really help in ensuring they sit up and take notice of your product when it arrives on their doorstep.
So, playing the long game here can make a huge difference and pay off down the line when you have a product that’s really struggling to sell.
Even if they decide not to spend time reviewing your product in full, simply seeing it in their hands could spark a new interest among your customers and put your product back on their radar.
Extend your returns and exchange policies.
Particularly after the Christmas period, lots of online sellers find themselves with a ton of leftover stock.
A good inventory reduction strategy is to extend your returns policy at certain times of year and on specific slow-moving products.
Christmas is such a chaotic period, having the option to return unwanted gifts, unused decorations and so on, could be extremely useful to shoppers who haven’t got the time to worry about returning items straight after Christmas.
Having that cooling off period could mean a lot to your customers and make the difference between them buying your product over a competitor.
Extending your exchange policy will also work in the same way, especially at Christmas when people are never sure what to get as gifts.
As well as Christmas, other gift-giving occasions or key retail dates, such as Father’s Day, festival season or back to school season, could be great times to extend your returns and exchange policies to help meet the needs of your customers and give them an incentive to buy.
There could be many reasons why your excess stock isn’t shifting, but one of the reasons could be uncertainty your product will meet their expectations.
By giving customers a longer decision making period to return or exchange, you’re removing this barrier from their buyer’s journey.
Most of the time people remember to return items within the first week, so a short extension like this is unlikely to have much of an impact on the logistics and costs of your return and exchange process anyway.
Liquidate, donate or recycle.
Finally, if all else fails and you simply can’t sell your excess stock, it’s time to get rid.
You may not be making much of a profit, but you’ll be saving yourself time, money and valuable storage space in the process.
Going down the route of liquidation can take a lot of hassle out of your hands.
Do note though, these companies are likely to cherry-pick items and at much lower price points, so you won’t see much profit, if any at all, but you’ll be freeing up space and capital.
Another option here is to donate excess inventory to charity.
There’s a few benefits of donating stock...
Often you can receive tax deductions on your donated inventory.
Non-profit organisations, schools, churches and similar businesses may give you a shout out to say thank you for your charitable donations, and you could even find yourself featured in relevant publications.
And of course, you’re doing a good thing for your community, supporting others and removing the burden of all your unwanted stock collecting dust.
Why leave it in your warehouse when it could go to a new home where it will be put to good use?
But say your stock has been damaged or gone out of date in the time it has taken to unsuccessful sell…
A last resort would be to recycle it.
However, to help avoid getting to this stage, you could apply the First In First Out (FIFO) method.
By applying FIFO, you’ll be able to batch products by their expiry dates or priority value you set.
This means that you’ll be able to dispatch your oldest stock first, reducing the risk of perishable goods becoming obsolete, such as food and drink, pharmaceuticals and cosmetics, and non-perishables becoming damaged or tarnished.
If you can’t find ways to sell your slow-moving stock, use it to your advantage by capturing contact details or as incentives to buy. If you’ve tried everything else, then it’s time to just get it out of your warehouse for good.
You should also keep on top of your inventory turnover rate, that being the number of times your stock is sold and replaced in a given time period, as this can help to inform you of the inventory you may need to drop.