how to turn slow-moving stock into cash

14 Ways to Convert Slow-Moving and Excess Inventory into Cash

• Have a Sale. The most obvious way to clear out inventory is to discount old and excess stock. ...
• Remarket and Reposition. Products may not be selling because of how they have been marketed. ...
• Bundle Products. Next to discounting, bundling is the most popular pricing method used by retailers. ...
• Use Low Cost Items as Incentives. ...
• If All Else Fails…. ...
• Wrapping Up. ...

Full Answer

What to do with slow moving stock?

If your slow moving stock could act as a complement to another product, consider, bundling those two items together. For example, you are selling a french press that is selling very well and a coffee blend that isn’t selling well. Bundle these two products together for an attractive package deal!

How to turn slow-moving and excess inventory into cash?

Here are 6 ways to turn slow-moving and excess inventory into cash. The most obvious way to clear out inventory is to discount old and excess stock. In order to create demand for these products, you’ll need to heavily discount. Consider offering discounts between 35-70%.

How do you make slow-moving inventory look more attractive?

A common tactic for making slow-moving inventory look more attractive is by bundling it with items in high demand. Shoppers who are interested in purchasing a top selling item will view a bundle as a bargain and are more inclined to go for the deal.

What is considered a slow moving item?

For example, if you ship zero items of a particular stock keeping unit (SKU) over a certain period of time, such as 90 or 120 days, then it is considered slow moving. The ratio of shipped items to days may vary.

How do you handle slow moving stocks?

Focus on combining trendy products with slow-moving stock items. So, bundling involves taking a specific group of products and selling it with another products group for a lower price. Pairing slow-moving inventory with high-demand products is a popular way of using the bundling strategy.

How do I sell my old stock?

10 strategies to sell excess inventorySell online.Offer sales.Bulk discounts.Give products extra exposure.Product bundling.Remarketing.Liquidation.Donate for a tax write-off.More items...•

How do you avoid slow moving inventory?

Inventory reduction strategies for excess or slow-moving stock.Have a sale. Sales are a great way to shift left over stock… ... Bundle stock together. ... Cross-sell and up-sell. ... Remarket and reposition. ... Use as incentives. ... Run a competition. ... Work with influencers. ... Extend your returns and exchange policies.More items...

How can I improve my slow moving products?

5 Tips to Help Promote Slow Moving InventoryCreate a bundled package. The practice on product bundling can often times be very effective. ... Increase internal awareness & communication. ... Develop targeted promotions. ... Repackage and transform. ... Incentivize your sale teams.

Can stocks be converted to cash?

But, when it's time to sell shares, some beginning investors struggle with how to turn their stocks back into cash. After all, money invested in stocks is not, immediately, cash. Liquid assets—like, stocks—can still be converted into cash in a short amount of time.

When should you cash out stocks?

Investors might sell a stock if it's determined that other opportunities can earn a greater return. If an investor holds onto an underperforming stock or is lagging the overall market, it may be time to sell that stock and put the money to work in another investment.

Where can I sell unsold stock?

Where to Sell Your Unsold InventoryTophatter. Tophatter is an ideal marketplace to sell excess inventory. ... Consignment Marketplaces (Tradesy, Poshmark, and Mercari) ... Thrift and Consignment Stores. ... Flea Markets. ... Local Marketplaces (Facebook Marketplace, OfferUp, and Letgo)

How do you increase stock turns?

There are several ways in which we can improve the inventory turnover ratio :Better Forecasting. ... Improve Sales. ... Reduce the Price. ... Better Inventory Price. ... Focus on Top Selling Products. ... Better Order Management. ... Eliminate Safety Stock and Old Inventory. ... Reduce Purchase Quantity.

How do you apologize for out of stock?

Here's what you should say: “We sincerely apologize for this inconvenience. We've experienced an unusually high number of orders and have run out of inventory.” Just be brief in the apology. Focus mostly on how to make things right, whether it's an immediate refund or links to similar products that are available.

How do you analyze slow moving inventory?

5 Tips to Help Identify and Address Slow-Moving InventorySpot-check four inventory items daily. ... Calculate inventory turnover. ... Analyze average days to sell (or use). ... Assess the cost to hold inventory items. ... Predict trends with sales data.

What causes slow moving inventory?

The factors that cause slow-moving inventory include the following: Inaccurate sales forecasts. Market slowdowns. Aggressive promotions from competitors.

Why do you liquidate inventory?

From a buyer's point of view, an inventory liquidation sale can provide a valuable opportunity to purchase goods at rock-bottom prices. However, liquidators can be picky about the merchandise they buy. They often avoid purchases of perishable or trendy goods that must be resold right away.

Do stock certificates expire?

Stock shares do not have an expiration date. There are companies listed on the stock exchanges whose shares have traded for over 100 years. However, there are several circumstances in which the shares of a particular company stop having any value.

Can I sell my shares without a broker?

Sell My Shares is an online platform and will act as the share registry holder and manage the transaction for you. So effectively you can sell shares without a broker in the typical sense.

What do you do with dead stock?

How to Turn Dead Stock Into SalesOffer customers a free gift. ... Bundle products. ... Clearance sales. ... Return items to a supplier. ... Donate dead stock items. ... Seek out partnership opportunities. ... Sell items on marketplaces. ... Refresh or re-merchandise.More items...

What do you do with old shares?

# Once your demat account is opened, you can place a request for conversion of your physical share certificates into dematerialised format. # You have to surrender your paper shares to the demat company along with a Dematerialisation Request Form. Use separate forms for shares of different companies.

What to do with slow moving stock?

If your slow moving stock could act as a complement to another product, consider, bundling those two items together. For example, you are selling a french press that is selling very well and a coffee blend that isn’t selling well. Bundle these two products together for an attractive package deal!

How long does it take to sell inventory?

Selling an item at a very low profit margin or even at a loss is better than it taking up shelf space. Inventory should usually be sold within 90-120 days. If items haven’t moved in this amount of time, it’s time to get rid of them. Holding on to old and excess inventory is costing you.

What is the most popular pricing method used by retailers?

Bundle Products. Next to discounting, bundling is the most popular pricing method used by retailers. Bundling is when you take a group of products and sell them as a bundle for a slightly lower price than if they were sold separately.

Why are my products not selling?

Products may not be selling because of how they have been marketed. Sometimes you just need to freshen up the product marketing to get these items to sell. Take a look at some quick changes you can make.

Is excess inventory inevitable?

Excess and old inventory is inevitable. However, you’re a savvy retailer who will find ways to turn your inventory into cash. The various tactics listed above should provide you with some creative ways to clear your shelf space and pile up some revenue in the process.

1. Offer a discount

OK, so there are a few ways you can go about this. If you’re selling merch exclusively online, you can offer discounts on purchases via promo codes, or by merely discounting items that aren’t moving quickly. Show the difference in price with a strikethrough over the original. The initial discount doesn’t have to be that big.

2. Bundle products together

Alone, that one hard-to-move product might be a tough sell, but packaged with other items it could finally find a home. You could include it with more popular merchandise to entice customers, or promote it as a complementary item.

3. Reward customers to give orders a boost

You can incentivize customers and help yourself by offering a free item with a purchase when they spend a certain amount. It can be a simple signup form on your site that says, “Spend $50 and get a free scented candle.” The idea here is that the “candle” is the item you’re trying to move.

4. Re-merchandise your product

Sometimes it’s not the product, but the merchandising that’s the problem. Try repositioning that merchandise to a more prominent section of your website or store to give it some new life. Another great way to do that is by building a landing page for “Last Chance” items, where you’ll get another opportunity to pique your customers’ interests.

5. Find shoppers with ads and social media

All of these steps will only make a difference if your audience knows about them. It's time to shout the news on the right channels. Tell people you're offering a discount, hosting an in-store sale, selling new product combos, and more with digital ads and on social media.

How to turn redundant stock into cash?

Luckily, there are many ways of turning redundant stock into cash. Here’s how. #1. Sell it to inventory liquidators. Inventory liquidators are always on the lookout for surplus stock. They offer a quick and easy market for your excess merchandise by buying it at a discount — and, they can buy entire inventories. #2.

Why do old stocks have to be written off?

Ultimately, the goods may have to be written off because they’ve become obsolete.

How does flash sale work?

A flash sale, where you offer huge discounts can clear your dusty inventory in no time. Flash sales work because the goods are only available for a short limited time hence people rush to buy.

How to increase sales velocity?

If you are currently using fixed pricing, the easiest way to immediately improve sales velocity is to implement dynamic pricing. Dynamic pricing allows you to adjust prices in conjunction with demand, moving more product and optimizing revenue in the process.

Can overseas markets snap up inventory?

Overseas markets can snap up your old inventory at reasonable prices. However, this only works when you want to move big volumes. Make sure you crunch the figures to make the whole campaign worthwhile.

Is stale inventory bad for business?

It also takes up precious space, balloons your storage charges, and raises your insurance premiums. Ultimately, the goods may have to be written off because they’ve become obsolete.

Can you return excess inventory?

If you have a good relationship with your suppliers, you can return excess inventory to them. Also, have a system to track and flag products whose return date is close. Most modern inventory management software has the capability to flag products whose return date is nearing.

What is slow moving inventory?

Slow-moving inventory blocks your resources as well as your revenue. Identifying it and its reasons can enable your business to learn and pivot. You can analyse the risk of inventory becoming obsolete and formulate an effective sales plan. With bold and drastic strategies, you can liquidate the inventory, soar up sales, and ultimately strengthen your bottom line.

What is inventory turnover?

Inventory turnover is a financial ratio that measures how quickly a product is moving from the warehouse to your customers. It is also known as inventory turns, stock turn, and stock turnover.

Can you clear stock if you sell slow moving inventory?

Despite selling your slow-moving inventory, you can still clear your stock. However, it won't bring you any profit, but there are other benefits entailed with it. Customers trust brands that are committed to a cause and they love freebies.

How to turn dead inventory into cash?

Look objectively at your inventory. The first step in turning dead inventory into cash starts with recognizing that your inventory is stale and it must go. This is often the hardest step for people. Be realistic about market value.

What is stale inventory?

Whether you’ve overbought on inventory, sourced the wrong products or have merchandise on hand with little shelf-life left in it, “stale inventory” is a common (and normal) challenge for online merchants.

How to determine slow moving items?

Another technique that industries use for determining slow-moving is to rank the items depending on their month-on-hand. The quantity of current inventory divided by monthly average usage helps in calculating the total months-on-hand. Slow-moving items generally have higher months on hand.

What is slow moving inventory?

The products or stocks that occupy the warehouse or storage room for a definite period are called slow-moving inventory. However, the categorisation of slow-moving is based on the industry or products that are considered slow-moving. In most industries, stocks not shipped within 90 days are considered slow-moving.

Why is inventory slow moving?

Slow-moving inventory can happen due to several factors such as market slowdown, forecasting of wrong sales, saving in cost per unit for ordering more volume, or for other company’s aggressive promotion.

Why avoid inventory stocking?

Try to avoid inventory stocking as it may create problems in your future. Nowadays, various processes of slow-moving inventory such as buying, processing, storing, and selling can be easily managed through different apps.

Is slow moving inventory a liability?

Slow-moving inventory can quickly turn into a liability . Business capital is tied up in slow-moving inventory, and it also captures resources that one can use for business growth. Therefore, it is essential to manage slow-moving inventory. The different ways to manage slow-moving inventory are the following:

Is stock slow moving?

In most industries, stocks not shipped within 90 days are considered slow-moving. It is a challenge to manage slow-moving inventory as it physically occupies space. Tying up capital for slow-moving inventory can slow down cash flow, and this can affect your business. Slow-moving inventory can happen due to several factors such as market slowdown, ...

Can slow moving inventory bring down your business?

Slow-moving inventory is a common nightmare for most retailers. But you should never think that slow-moving inventory can bring down your business because still, you can earn profit from your slow-moving inventory. The reasons are mentioned below:

Difficult to shift

Many organizations’ approaches to tackle high levels of inventory don’t work very well, either because they address only part of the problem, or because they fail to recognize that the dynamics of slow-moving inventory are fundamentally different from fast-moving items.

Time to get smarter

Facing cash shortages, one large industrial-equipment manufacturer took a more nuanced approach to its spare-parts inventory. Over a period of only six months, the company adopted a suite of measures to address the causes of inventory accumulation and stimulate sales of slow-moving parts.

From cash sink to profit uplift

The company’s most effective change, however, was the adoption of a set of initiatives designed to sell excess slow-moving inventory to customers, suppliers, and third parties.

About the author (s)

Paolo Baldesi is an associate partner in McKinsey’s New Jersey office, and Florent Kervazo is a partner in the New York office, where Hugues Lavandier is a senior partner.

What is slow moving inventory?

Slow moving inventory is defined as stock keeping units (SKUs) that have not shipped in a certain amount of time, such as 90 or 180 days, and merchandise that has a low turn rate relative to the quantity on hand.

Why is slow moving inventory important?

Slow moving inventory takes up valuable warehouse space and ties up capital. Therefore, it’s important for any online seller to come up with a plan of attack for dealing with merchandise that is slow moving. The most common method for dealing with it is to slash the price.

What happens when inventory doesn't move?

When inventory doesn’t move, there are associated carrying costs and it ties up valuable capital and resources that could otherwise be used to invest in your business. So the question is, how do you define what is actually “slow moving,” and then what do you do about it? Let’s start with a definition….

Why is it important to account for per unit purchasing costs when using stock turns?

So, it’s important to account for per unit purchasing costs when using stock turns to define slow moving inventory, and it’s unreasonable to expect high stock turns when ordering in large quantities to minimize your per unit cost.

How to get online shoppers to love bargains?

2. Deal of the Day.

Is slow moving inventory bad for sellers?

In general, slow moving inventory is a detriment to sellers, and, depending on the size of your catalog and order volumes, it can be a big benefit to sellers to have someone internally that is solely dedicated to optimizing inventory management and reaching economic order quantities across the board. Summary.

Can you include slow moving items in customer orders?

You could also include slow moving products as “bonus” items in customer orders. This may not be the most ideal option for higher value merchandise, or items that are heavy and will add significantly to your shipping costs, but for lower value and smaller items, this can be a nice way to thank your customers, and even introduce them to new products that could help encourage repeat purchases.