When you're running a business that sells product, you're bound to end up with old inventory. When this happens you then have to decide what you're going to do with the old inventory you're left with. But whatever you decide to do with the old inventory, there is going to be an option that fits best with the type of product you deal with.
There are a number of ways that you, as a business owner, can deal with this old inventory, such as:
This is often the first option that business owners who hoping to move old product will go for. This is for good reason, sales are a fantastic way to motivate customers to buy, and everyone loves getting a deal.
The key to discounting products is to do it properly. Having too many sales and consistently offering steep discounts can undermine the overall value of your products, which makes customers wary of purchasing anything at full price, and can actually end up hurting your bottom line.
Brianna Hallet, owner of Swizzlesticks SalonSpa, says that sometimes just moving old inventory to a new location can spark new interest,
“Often a simple relocation in the store can revive dead stock”, she explains, “so we usually start with that.”
The reasons for this are simple, your customers get used to seeing the same old stuff in the same old location. If they didn’t buy it last month, why would today be any different?
But when you change the location of products, you change the customer’s visual landscape and, more often than not, you can change their buying behavior too.
Hallet says her next step after relocating products is to piece out her inventory.
“If it’s a package, we will break the packages up and individually price the pieces.”
A bundled item might be slow to sell because your customers don’t want to shell out for two items they don’t need just to get one they do. Selling products individually also allows customers to choose exactly what and how much of it they want.
Oddly enough, the reverse approach to breaking it up often works just as well. Bundling products together and offering them together at a discount is a great way to invite customers to try something new alongside their old favorites. It also gives the impression of getting something more valuable for less money, much like a sale.
Contributing products to auctions, door prizes or swag bags is always a fantastic way to get your business name out there while also supporting great community causes. Customers love to support businesses that are active in their community, so although you’ll be losing the value of the product, you’ll be getting your name out there to a new group of people and generating plenty of goodwill. Think of it as a friendly form of advertising.
Your customers might not be buying your old inventory, but I guarantee that somewhere out there is a person or organization that could really use it. Clothing, food, health and beauty products, games, pet food, you name it and there’s a somewhere which would benefit from receiving it.
The best part of donating old inventory, aside from helping those in need, of course, is that you can write off the amount of the donations on your taxes.
For small business owners dealing with perishable goods like food and drink, keeping inventory around until it sells just isn’t an option. In situations like this, it can be a great idea to give about-to-expire inventory away for free to bring a smile to the faces of your staff and best customers.
Jackson Avio, owner of Jackson’s Ice Cream in Victoria, Canada, says, “We’re a seasonal business and when the weather changes and our season ends we do end up with some leftover tubs of ice cream. First we offer it to our staff (if not they’re not sick of it yet!) and then we extend the offer to friends. It makes for some happy college students!”
Keeping your staff happy is never a bad investment.
If no one in your local market is interested in old inventory even after discounts and other incentives, try expanding your customer base. Don’t worry about setting up an online sales platform just yet, you can easily clear a set amount of old inventory by using sites like eBay or Etsy.
This is a fantastic way to generate sales for your business while also dipping your toes into the world of online sales if you haven’t done so already.
While this wouldn’t work for the ice cream man we talked to above, keeping old inventory can be a viable option for businesses that sell non-perishable items. This typically applies to things aren’t affected by age, or shifts in technology and trend cycles, like building materials or handmade wood furniture, and even businesses whose product can improve with age, like wine.
As long as you have a solid inventory management system, enough room to do so, and your business can function comfortably without the immediate sale of those products, keeping old inventory around to sell in the future can save you from discounting or giving away viable products.
This is a term small business owners hear a lot but may not fully understand. Writing something off simply means removing its cost from the accounting books, so if you’re dealing with something outdated or obsolete, writing it off and disposing of it responsibly may be your best option.
Make sure that if you do choose to throw something out because it’s unsellable, whether thats due to age, defect, or damage, you do so properly.
Research electronics recycling facilities in your area to dispose of these items, look into repurposing or recycling old textiles, and compost appropriate perishable food items. Just because the product doesn't benefit your bottom line anymore doesn’t mean it has to damage the environment.
