Help! I Have Too Much Inventory!
Most retailers will keep merchandise in their stores for too long. What's too long? Well, if there's already a newer model of the same item out, it's probably time to phase out the older version. Like a car, the value of merchandise begins to drop significantly once a newer model is released. There may be a few exceptions to the rule, but generally, it's best to take the cash you can get and reinvest into newer merchandise that will yield a higher return.
If you're stuck with older-model inventory, there are a few options for clearing out your shelf space:
Most stores keep a clearance rack to appeal to bargain shoppers. This is a great option for any older model inventory. However, most retailers simply mark down an item and add it to an ever-growing clearance rack. It doesn't take long for most stores to end up with more on their clearance rack than they ever intended. When you put an item on the clearance rack, we recommend you start by marking it down 30%. If it's still there after a week or two, mark it down to 60% off. Remember, the idea is to get this inventory out of your store! If an item has been on your clearance rack for two weeks, it's time to move on to one of the options below.
The traditional side-walk sale is a great option when you have a large quantity of older-model inventory that you need to move. The visual appeal of having items out front of your store is likely to bring in additional foot traffic. Price items at 40-60% off to sell through them quickly. If you want to improve your margin, keep some smaller, lower-price items near your checkout for impulse buys. Keep in mind, you may need to have additional staff to help support the extra traffic and expanded floor-space used during a sidewalk sale. Sidewalk sales are not meant to be perpetual so use them as one-off occasions to clear out older models. Be sure to spend some time advertising to customers before and during the event via social media and email.
As you probably know, thrift stores are always interested in donated merchandise. There are also a variety of larger regional and national non-profit organizations that take inventory donations and turn them into funding scholarships or financing programs for those in need. Most businesses end up getting a straight cost deduction for any older model merchandise that is donated. While this sounds like a deal, keep in mind that you'll be required to fill out some additional paperwork at tax time and your gains won't be realized until then. You won't actually receive any type of "payment" for a donation, it will simply be a tax deduction.
A variety of resellers, wholesalers, and liquidators in your area are likely interested in your older-model merchandise. The good news? They'll likely buy it in large quantities, so you can get quick cash in only a few transactions. The bad news? Most of them are only going to give you pennies on the dollar, and you'll end up taking a big loss on the merchandise. It's also possible that these items will be resold locally and could end up in one of your competitor's stores!
BoxFox.co helps retailers sell their older model inventory directly to another business. Businesses submit a list of their inventory or use the
BoxFox mobile app to post their inventory for sale on the BoxFox marketplace (note: there is no cost to list inventory). Buyers compete for your inventory, helping you get the best possible price.
· Get the most cash, with an auction marketplace where a network of buyers compete
· Risk-free, with no obligation to accept an offer unless it exceeds your minimums
· Easy to use, with managed shipping and payments
Key Reminder: When you're dealing with older inventory, don't delay - it's best to get the money and reinvest in profitable merchandise. Holding on to inventory too long can be a drain on your retail store, making cashflow tight and keeping you from growing your business.
If your inventory is piling up, let the excess inventory experts from BoxFox help you out. Contact them today at firstname.lastname@example.org.