Most of us in business have faced this situation at some point. You’ve got shelves or a warehouse stacked with products that are just sitting there, gathering dust. It’s not ideal. It ties up your money, clutters your space, and slowly chips away at your margins. So, what can you do about it?
Understanding inventory stock turnover is a great place to start. It helps you get a clear picture of how efficiently your products are moving. And once you know that, you can start making smarter decisions to shift old stock and breathe new life into your inventory.
Let’s break it all down in a way that helps you take action.
First things first: What is inventory turnover?
Inventory stock turnover is a measure of how often your business sells and replaces stock over a certain period. When things are flying off the shelves, turnover is high. When things linger, it’s low.
It’s a key sign of how well you’re managing your inventory. If products move quickly, you’re likely pricing things right, targeting the right customers, and keeping your stock levels healthy. If they don’t, it might be time to rethink your approach.
So, how do I calculate inventory turnover?
It’s easier than you might think. All you need are two numbers: your cost of goods sold (also known as COGS) and your average inventory over a set period.
Here’s the formula:
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
Let’s say you spent £100,000 on goods over the year, and on average, you had £25,000 worth of stock sitting in your warehouse. That means your inventory turnover would be 4. In other words, you sold and replaced your stock four times during that year.
A higher number usually means things are running smoothly. A lower number? That’s a sign you might be carrying too much old or unsellable stock.
Why does it matter?
Because unsold stock is money sitting still. It takes up space, costs you in storage, and often loses value the longer it sticks around. Improving your inventory rotation helps free up your cash, makes room for newer products, and keeps your operations lean and efficient.
How Do You Clear Out The Backlog
So, how do you actually move the slow movers and clear out the backlog? Let’s look at six smart strategies that work in the real world.
1. Bundle up and offer deals
If a product isn’t selling on its own, try pairing it with something that is. Bundles can add perceived value and help shift items that aren’t as popular on their own. Think of it as giving people a little extra incentive to buy.
For example, if you’ve got last season’s phone cases still in stock, bundle them with accessories that are currently trending. The customer gets more for their money, and you get to move old stock without slashing prices too aggressively.
2. Use flash sales to stir up interest
Nothing lights a fire under slow stock like a flash sale. Limited-time offers create urgency and make people feel like they’re getting a bargain. This works especially well if you promote the sale across email and social media.
You don’t need to discount everything. Just focus on the items that have been sitting too long. This approach boosts your stock turnover ratio and gives your cash flow a much-needed boost.
3. Get listed with Surplus Stock Buyers in the UK
There’s a whole network of companies and resellers out there that specialise in buying excess or unsold stock. Listing your products with Surplus Stock Buyers in the UK can save you a lot of hassle. You sell in bulk, clear space quickly, and avoid deeper losses.
You might not get full retail value, but sometimes just recovering some of the cost and freeing up space is the smartest move.
4. Turn unsellable goods into a recycling win
For items that are no longer sellable or have gone completely out of date, consider solid waste solutions. Recycling or repurposing old stock is better than letting it rot in storage or paying for long-term warehousing.
In some cases, materials can be broken down and reused. In others, you might find a local business or organisation that can make use of your stock in a different way. It’s not only practical, it’s environmentally responsible too.
5. Try selling liquidation stock pallets in the UK
This one is gaining popularity fast. If you’ve got a large quantity of unsold goods, you can sell them in bulk as liquidation stock pallets in the UK. There are many resellers, marketplaces, and trade buyers who snap up these deals.
It’s ideal for clearing space quickly, especially when dealing with mixed or seasonal inventory. You make some money back, and someone else gets a deal they can work with.
6. Time for an Office strip-out?
If your business is relocating, downsizing, or undergoing a major revamp, an office strip-out can give you the chance to review all your assets and dispose of unused inventory smartly. It’s more than just clearing desks and furniture. It can be the reset your stockroom needs.
During the strip out, you can tag everything that’s worth keeping, selling, or recycling. It’s a chance to refresh your workspace and your stock list at the same time.
Final Thoughts on Improving Merchandise Turnover
Staring at unsold stock is never fun, but it’s not the end of the world. With a clear look at your merchandise turnover, you can make informed decisions to improve your flow and keep things moving.
Start by tracking your numbers. Then apply a mix of the tactics we’ve discussed. Some items might sell better in bundles, some through flash sales, and others through third-party buyers or bulk liquidation.
Managing stock is about staying flexible, adapting quickly, and always being one step ahead. If you do that, your storage space stays tidy, your money keeps flowing, and your customers stay happy with fresh, relevant products.
Remember, your inventory should work for you, not against you.
Need help moving your stock? We have got you covered! Get in touch for practical advice on turning your excess inventory into opportunity.
