A Beginner’s Guide to Dealing with Excess Inventory
No matter how lean an organization is, at some point, it is bound to suffer from the consequences of havingexcess inventory.
The culprit may be you being overly enthusiastic during purchases or you going overboard while making predictions. But technologies and changes in the marketplace alsopave the way for overstock.
In most of the cases, you would not unfortunately be able to recover the costs. You can however try to eliminate the inevitable decline in value that aging inventory generally faces. Mentioned below are eight ways that have proven helpful. Please check them out now.
- Return for Refund
According to the experts providing top-notch RFID inventory management solutions, if your provider allows this and will give a reasonable discount or full refund, then this may be the best choice. You will perhaps take a hit on the shipping and dealing, but, at least you can replace the excess for something useful.
- Divert Inventory to Brand-New Products
The raw materials can be utilized at other plants or in other lines. The inventory may need rework, so, the price of that should be taken into consideration. Some modern-day organizations have developed whole-new products based on overage and scrap from others.
- Trade with the Industry Partners
When it comes to sharing the inventory and supplies, the competitors may be your friends. The products taking up all the space in the warehouse could actually be what another organization needs at the moment. In return, they may offer something you can use. Such an interaction not only contributes to inventory management but also builds valuable relationships.
- Sell to the Customers
The path for this relies on whether your customers are consumers or businesses. If you are planning on selling directly to the businesses or distributors, then reaching out to them with a special deal on finished products may work. You may try packaging a product for a discounted cost. Regarding the end users, there are many who do not care about having the recent model and will happily buy outdated inventory.
The experts providing the best RFID retail inventory management systems said independent distributors will let you maintain complete ownership while taking a cut on sales. Consignment can be virtual, which means you get to keep the goods, and you have to ship them once the sale is final. In case of physical consignment, the distributor stores the goods and handles the delivery.
If you wish to liquidate the stocks, you are just trying to get rid of them. A liquidator will purchase whatever you have for negotiated cost. That is all you can expect from this particular deal.
With the ready availability of online platforms such as eBay, you will be able to sell the inventory to whoever wants it directly. This calls for substantial time on behalf of the staff and can be a slow and tiring procedure. Remember, not everything is going to sell.
The completely obsolete inventory can be sold for the materials it has, cloth or metal, for example. Scrap dealers come and get it if the product has any value and pay a small amount. In the worst cases, you may have to pay to shred the product down.
Disposing off the excess inventory is considered a balancing act between capitalizing on what you can easily get your hands on and further investment of staff as well as other resources.
To prevent the complications, please closely monitor the inventory and eliminate them if and when they cross the desired level.