Managing inventory is a critical aspect of running a successful business, but what happens when you have more stock than you can sell? Surplus inventory, also known as excess inventory, can be a burden, tying up capital and incurring additional costs.
Fortunately, companies like Surplus Solutions Group specialise in making the process of selling and buying excess stock simple and efficient.
In this blog, we will go over what it is, how you sell your surplus inventory, and why it matters for your business. So, let’s get started!
What is Surplus Inventory?
Surplus inventory refers to any amount of product that your company holds beyond what is necessary to meet demand. This includes items that are overstocked or simply haven’t sold as well as anticipated.
Holding excess inventory can be a safety net against sudden demand spikes, but it can quickly turn into a costly issue if not managed properly.
6 Drawbacks of Excess Inventory
While having a bit of excess inventory can cushion against fluctuations in demand, holding too much stock comes with significant downsides:
1. Increased Storage and Holding Costs
Every piece of inventory has associated costs: storage systems, warehousing space, and labour. The more stock you hold, the more these costs pile up. Selling inventory helps offset these expenses, but when it comes to surplus items that don’t sell, businesses end up wasting money.
2. Risk of Inventory Spoilage Leading to Unnecessary Waste
Products that sit on shelves for too long can lose value, become damaged, or even expire. This risk is particularly relevant for perishable items. Ultimately, your business may have to deal with higher levels of abnormal spoilage, leading to unnecessary waste.
3. Reduced Profitability
Tying up capital in unsellable products restricts your ability to invest in more profitable inventory. Moreover, excess stock occupies valuable space that could be filled with fast-selling products, making it harder to meet current demand. Eventually, you may need to reduce prices to offload older stock, further cutting into profit margins.
4. Inventory Obsolescence
When inventory sits idle for too long, it can become obsolete. Whether due to changing market trends or advancements in technology, products can lose their market value. This obsolescence not only results in lost revenue but also leaves you with stock that won’t sell.
5. Increased Waste from Packaging
As your surplus inventory sits unsold, so too does the packaging material for those products. Disposing of both the unsold goods and their packaging contributes to overall waste, making your business less sustainable.
6. Increased Carbon Emissions from Unnecessary Transportation
Transporting inventory creates carbon emissions. Excess inventory adds to this burden unnecessarily. By optimising your inventory levels, you can help reduce your carbon footprint.
How To Sell Surplus Inventory?
Selling surplus stock involves more than simply throwing it up for sale. To maximise returns and free up space efficiently, you’ll need a clear strategy.
Step 1: Assess Your Inventory
Start by thoroughly assessing your current inventory. Identify products that have been sitting in storage the longest or have consistently underperformed in sales. Once identified, categorise them based on the potential for sale, depreciation value, and current demand in the market.
Step 2: Determine the Value of Your Surplus Stock
Next, determine the value of your surplus stock. This is often lower than the original retail price, so consider factors like product condition and market demand when setting a price. This will help attract the right surplus inventory buyers while still allowing you to make a reasonable return.
Step 3: Decide Where to Sell Overstock Inventory
Multiple channels exist for buying overstock inventory, depending on your business model and product type. Options include:
● Online Marketplaces
Platforms like eBay and Amazon allow you to sell individual products directly to consumers, but they can take time to yield profits.
● Business-to-Business Sales
If you have large quantities of goods, selling to other businesses may be viable. However, be prepared for lower offers, which could result in a net loss.
● Third-Party Liquidation Buyers
This type of excess stock buyer specialises in purchasing excess stock for resale. This option is particularly useful if you need to sell quickly and in bulk. Surplus Solutions Group is one of the most reputable third-party liquidation buyers in the UK.
Step 4: Consider Liquidation Services
If you need to move stock fast or your excess inventory is taking up valuable space, liquidation could be your best option. Liquidation buyers, like Surplus Solutions Group, can take the unwanted stock off your hands quickly, allowing you to refocus on new products or ventures.
Step 5: Research Potential Buyers
When looking to work with liquidation buyers, conducting thorough research is crucial. Find buyers who specialise in your type of product and have a solid reputation in the market. This ensures a smooth process and a fair price for your goods.
Step 6: Negotiate the Terms
Once you’ve identified potential buyers, it’s time to negotiate terms. Agree on the price, determine who will cover shipping costs, and set a timeline for payment and delivery.
Step 7: Prepare the Inventory for Sale
Before shipping off your excess inventory, ensure it is properly prepared for sale. This includes appropriate packaging, confirming that the goods are in sellable condition, and making sure all relevant paperwork is in order. Well-organised stock helps expedite the sale process.
Step 8: Finalise the Sale and Shipping
Finalise everything by arranging shipping or delivery. Keep meticulous records of all verbal and monetary transactions.
3 Benefits of Excess Inventory Liquidation
Liquidating excess inventory offers numerous advantages beyond merely freeing up warehouse space. Here’s why it’s worth considering:
1. Free Up Storage Space
Excess inventory occupies valuable space that could be better used for newer, high-demand products. Selling surplus stock allows you to clear this space for items that can drive sales.
2. Recover Lost Capital
Every piece of inventory sitting unsold in your warehouse ties up capital. Selling off excess stock allows you to recover some of that investment and reinvest it in more profitable ventures.
3. Improve Cash Flow
Selling surplus goods can provide your business with a much-needed boost in cash flow, particularly during challenging financial periods. This extra capital can be crucial for paying off debts, investing in new stock, or covering operational expenses.
Wrapping Up: Streamlining Your Surplus Inventory Process
Navigating the complexities of surplus inventory can be daunting, but with the right strategy and partners like Surplus Solutions Group, it doesn’t have to be. By understanding the implications of excess stock and taking proactive steps to sell it effectively, you can recover lost capital, improve cash flow, and make room for more in-demand products.
So, if you’re sitting on surplus inventory, consider your options carefully. With the right approach, selling your excess stock can be a straightforward process that benefits your business in the long run!
