In the world of business and commerce, stock management has become crucial to meet the demand with proper supply. To avoid inflation, many businesses often store excess stock in their warehouse, which gets wasted if not consigned properly. Excess inventory not only takes up the important shelf or warehouse space but also ties up your capital which can otherwise be used to purchase trendy products. Consigning and selling surplus inventory is a daunting task that requires proper planning and an effective strategy to avoid any loss. There are many ways of selling surplus inventory, such as consigning surplus inventory, offering sales and discounts, bundling with other products, etc. This ensures effective inventory management, maximizing gains and clearance of surplus items. In this blog, we will shed light on how to consign surplus inventory and unlock the potential of the excess stock.
Check the access inventory
The first and foremost step is to check and identify the goods that are not selling well. Sort the surplus inventory and categorize it according to its niche. Check the inventory’s quality, durability, price, quantity, market demand, and supply. Clean and repair them if required. Sort them according to market demand and pricing and select the ones that are likely to sell quickly. Easily sellable goods offer you high value and gain more compared to ones with less demand.
Set Realistic Goals
Decide what you actually want to achieve by selling the surplus stock, whether it is revenue, gains, space, recovering capital, or something else. The clear goals allow you to set a proper strategy and price for consigning the surplus inventory efficiently. Moreover, the strategy that you want to choose also depends on the goal you want to achieve. For example, if your primary motive is just stock clearance, then bundled up or free gifts can be an ideal option, whereas if the objective is gaining profit, then consigning surplus inventory would be a suitable option.
Choose the Suitable method
There are 3 main methods that 80% of companies opt for while planning to sell surplus inventory
- Consign Surplus Inventory
- Offer sales and discount
- Bundled deals
Consign Surplus Inventory
Consign Surplus Inventorybasically means businesses and consignment service partners get into an agreement where businesses send their excess stock to the consignment partners. They get access to a wide range of products from different businesses. These consignment service agencies work as your sales channel and have a diverse group of buyers who buy from them. Businesses earn profit by sending the inventory to these companies. Research and identify consignment partners who are ready to take your surplus inventory in exchange for money. Find partners in local consignment stores and online marketplace through referrals and wholesalers. Choose the one that matches your product niche and target market in order to get the maximum value. For this, you can utilize online marketplaces like eBay, how to become an amazon influencer, or private companies that deal in consignment services. Read their teams, conditions, rules, and policies to get a fair and relevant deal. Make sure to check the fees and commissions of third-party vendors who help you to clear the stock. Select the one that charges less stock clearance fees to get maximum profit ultimately. Check their reviews and ensure that their services have gained satisfied clients in recent times. This helps you to save yourself from fraud or any kind of scam.
Offer sales and discount
When customers notice a 50% discount or 70% off, it influences them to go to the showroom and look at the things offered for sale or discount. Offering high discounts allows you to attract people and sell them your surplus inventory at a suitable price. Stock clearance sales are popular in the business world where sellers clearly define it and still get massive customers due to less price and offers.
Bundled products
Bundled deals are one of the most effective ways to clear the surplus stock and increase the sale of the resulting stock. Surplus products often get bundled with the high price products that have high margins and prices to cover both costs. Combining outdated stock with a trending product in the market is a great strategy to attract and encourage customers to get the products. Combining headphones with a television, a mouse with a laptop, etc., are examples of bundled products. A combination of complementary goods rather than supplementary goods is an effective and proven strategy to sell more.
Negotiate terms and conditions
If you choose to consign surplus inventory, communicating with the selected consignment partners and negotiating terms and prices is necessary. Discuss the type of stock, terms of consignment, and desired price of the surplus inventory. Ask about their requirements, present them with your list of stock with the price, and allow them to choose the products they can take. Negotiate the terms properly to ensure maximum profit. Discuss commission rate, fees, negotiated price, transportation, consignment period, payment methods, pricing strategy, shipping, handling, promotion, etc. Effective communication and transparency are important in the whole process to maintain an ethical and fair sale.
Prepare documents and fix the price
Prepare a clear and final document that contains the item description, price, quantity, invoice, condition, etc., of the items the consignment agency is purchasing. Creating such documents helps to avoid any conflicts or legal matters if they occur. To avoid confusion or mistakes, make sure the labeling on the package is correct. Use a competitive pricing strategy combined with desired profit to fix the price. Do proper research about the product’s value in the market, its demand and supply, and consider the commission or fees in between. You can choose a cost method, market value method, or net realizable value method to fix a profitable yet fair price. Do not fall for cheap pricing in the name of the negotiated price, as that is way less than the market value of your product; you will not get any profit in such a situation except for stock clearance and empty space. Once you are ready with the final documents, contact the partner for the shipping of surplus stock.
Conclusion
Excess stock is difficult to manage, therefore, most businesses apply strategies to sell surplus inventory to clear the stock along with gaining revenue. As we say, “Something is better than nothing,” so it’s a better option to sell the excess stock at a discount or negotiated price to the consignment agency. According to many business experts’ experiences, consigning leftover goods is a better alternative because you get a fair price from the service agency, along with getting space, increasing profit, and promoting products.
