5 Inventory Management Techniques to Adopt In 2016

Maybe you ordered a bit too much stock, or maybe that hot ticket item you were banking on for the holidays didn’t pan out.

Either way, you’re stuck with a retailer’s worst nightmare: excess inventory. But before you throw in the towel, we have a few inventory management techniques — that if executed correctly — can send that inventory packing, while boosting your profits. Hanging onto old inventory to sell next year at full price might sound like a good idea, but it’s ultimately getting in the way of your productivity, preventing you from ordering new merchandise, and ensuring you won’t turn a profit from these items. Selling these items, even at a discount, ensures additional cash flow to purchase new (and hopefully more popular) items.

1. Re-Merchandise

Just because merchandising an item one way didn’t see sales, doesn’t mean a few tweaks to your display can’t produce big results. Take that oversized knit shirt that looks so good on your mannequin but has yet to flatter a single human figure. Ever tried repurposing it as a beach cover-up? Presto chango! May we present next season’s best selling item! Though we can’t guarantee a sold out storefront, you’d be surprised how a few small tweaks to retail displays can have customers taking a second look at merchandise they might normally pass up.

2. Hold a Flash or Sidewalk Sale

Sometimes all slow-moving inventory needs is a few dollars off and a change of scenery. Since nothing brightens up Main Street more than the vibrant colors of a sidewalk sale, grab your nearest folding table and your discount stickers and head to the street! Don’t live in a warm locale or can see rain outside your window? That’s ok; bring the party indoors with a weekend flash sale where different items are marked down for certain hours of each day. Send out an email blast and post announcements on your social channels to let customers know which items will go on sale and at what time of the day. The limited hours for certain items will create a sense of urgency that will get your customers in the door and excited to shop. Social media is a great tool to promote flash sales, specifically channels like Instagram and Twitter. Need to learn more about social media? Check out our post on 5 Ways to Make Your Small Business Social Media Strategy More Effective.

3. Offer Bulk Purchase Discounts

We’ve all been there, not quite sure if we want that shirt or need that cookie. Am I right? But there is always that magic point in consumerism where no one, not even the most seasoned shopper, can resist a deal. There’s just something about the infamous two-for-one and buy-one-get-one-free deal that put our hearts aflutter. It’s an oldie, but goodie. So take advantage of this age-old retail hack and say, “be gone!” to that stale excess inventory.

SEE ALSO:5 Hacks for Smarter Inventory Management During the Holidays

4. Consider Using a Daily Deals Site

Just because these items didn’t sell in your store, doesn’t mean they won’t sell on a different platform or channel. You’re probably familiar with daily deal sites such as Tanga.com or LivingSocial. You’ve probably even purchased a few things on them yourself. But have you ever thought of them as a channel to sell your merchandise? The benefit of using a daily deals site is the sheer number of additional customers you’ll reach. Your store might have a few hundred or even a thousand email subscribers, while large websites such as these can have hundred of thousands if not millions of subscribers. Each deals site varies slightly, so make sure to check out their merchant testimonials and terms of service to determine which site will fit your business best.

5. Donate Items

As much as we hate to admit it, sometimes perfectly good merchandise simply doesn’t sell. Maybe the weather was unseasonably warm, or maybe Oprah declared war on the color blue. For whatever reason, those beautiful blue sweaters you ordered, fell off the shelves, more than they flew. When all other options fail, now is the time to consider donating old goods and freeing up stockroom space for new (and hopefully more successful) merchandise. It might seem like a blow to your bottom line, but donating to a 501(c)(3) organization will qualify you for a deduction come tax time. Not sure if the organization you are looking to donate to will qualify you for a deduction? Check out this search function on the IRS website. Whether you decide to use one of our inventory management techniques or all five, taking initial steps towards merchandising and selling old, or out-dated goods, will make a huge impact on your business. Not only will selling excess inventory free up physical space in your store, but it can provide additional cash flow for your business.

Sara Sugar

As Managing Editor at ShopKeep, a leading iPad Point of Sale System, Sara Sugar uses her distinguished journalism background to boil down small business and point of sale topics.