How to Manage Excess Inventory in Your Business
Managing inventory is a necessary evil for businesses across a wide variety of industries. One must ensure that their warehouse has sufficient stock at all times while also taking caution not to create too much of a surplus. Regardless of how lean a business’ operations are, all corporations will end up with excess inventory at one point or another. Excess inventory may not seem like a major issue at first glance, but over time it can significantly impact your company’s profit margins and increase storage costs. Luckily, there are several options for how to manage excess inventory in your business. This guide will help you choose a method that works best for your business and your budget.
Sell It
Many companies’ first instinct, when faced with excess inventory, is to simply sell it. This is a valid choice, as the items are usually still in pristine condition. There are several avenues a company can take if they choose to sell off excess inventory items. First, they may choose to sell the excess items directly to consumers at a discounted price. Warehouse sales are a very popular option for retail businesses looking to free up space in their storerooms, and consumers can often find fantastic bargains at the same time. A company may also offer the surplus item to customers as a free giveaway with the purchase of another product. Companies can also sell their excess inventory items to an inventory liquidator. This liquidator will purchase all your excess items at a negotiated price and then attempt to sell them to consumers on their own dime.
Salvage It
In instances where resale is not an option, excess inventory items that are still in good condition may still be salvageable. While the excess items may not be reusable exactly as they are, you can still break them down to their raw materials to use them in different ways. If you’d prefer to salvage the products as much as possible, you may also consider swapping items with an industry partner. This option is mutually beneficial. In swapping items with a fellow industry partner, you will not only help free up space in your warehouse, but you will likely receive new items from them in return.
Scrap It
If your excess inventory items are neither salvageable nor viable for resale, perhaps due to branding rights or inferior quality, you may want to simply scrap the items altogether. This option is most applicable to items that have been damaged, recalled, or do not adhere to industry quality and safety standards. Disposing of mass quantities of inventory, however, is sometimes easier said than done. Generic waste management systems do not often accept waste in such large quantities, and you may need to employ additional waste removal systems to manage the disposal of your excess inventory items. Utilizing the services of a specialized waste management system will ensure that the destruction of your outdated or excess products goes off without a hitch.
