While it’s great to have a robust inventory, too much can lead to financial problems down the road. As consumers splurge on gifts, many brands are left with extra products that don’t sell.
To avoid being stuck with unsold inventory and incurring unwanted costs, brands need to be strategic about managing their excess inventory after they’ve wrapped up a sales campaign. In this post, we’ll cover the main challenges facing brands today when it comes to overstock and how they can manage it.
Top inventory challenges brands are facing
New products, shipping delays, and over-estimating inventory needs can all create the perfect storm for excess inventory. In order to respond to supply chain demand and inventory shortages that were widespread in the earlier stages of the pandemic, brands found themselves ordering inventory en masse.
In fact, some stores like Target saw their inventory balloon by 43%. This has now created a situation where brands are finding themselves with an overwhelming amount of excess stock on their hands while facing roadblocks from different directions, such as:
- Inventory tracking: One of the main challenges that brands face with excess inventory is tracking inventory levels and knowing what needs to be reordered. This can be a time-consuming and costly process if done manually.
- Warehouse space: Another challenge that brands face is having enough warehouse space to store excess inventory. As excess inventory becomes a widespread issue, so does warehouse capacity. This can be especially problematic if the brand doesn’t have its own warehouse or if they’re renting space from a third party.
- Rising costs: As inventory levels increase, so do the costs associated with storing and shipping the excess inventory. This can put a strain on a brand’s budget and may cause them to raise the prices of their products. In turn, this can influence consumers’ purchase decisions when prices start to increase, leaving them to stay on shelves for longer.
- Customer expectations: In today’s fast-paced world, customers expect to receive their orders quickly and efficiently. In a report, 44% of consumers now define “fast” shipping as next day, whereas this number was only 14% back in 2020. This can be a challenge for brands dealing with excess inventory levels and may cause them to lose business to their competitors.
7 Tips on Managing Overstock
Going into the final quarter of this fiscal year, it’s essential to have a handle on managing your business’s excess inventory. The surplus of inventory that many brands are facing is expected to be one of the biggest challenges this year. However, with solid advanced planning, creativity, and consistent inventory monitoring, it’s possible to clear out some of your overstock.
1. Sell overstock on other channels
When a brand has overstock of a product, turning to a multi-channel sales strategy helps minimize excess inventory. Brands can rely on social channels or marketplaces to get excess inventory in front of a new audience and move it faster. This is a great way to manage overstock because a brand can list the product at a discounted price and still make some money off of it. Selecting the right products to sell on a specific marketplace is a great way for brands to achieve growth and move overstocked inventory.
2. Offer discounts on overstocked items
Many brands offer discounts to help reduce overstock inventory. The most common method is to offer a percentage off the original price. Holidays or promotional sales are a great opportunity to offer steep discounts to shoppers in order to sell off some excess inventory. For example, brands can offer lightning deals on specific products that are significantly discounted for a short period of time, buy one get one deals, or other promotions on overstocked items.
3. Keep track of inventory levels
In order to manage overstock, brands need to track inventory levels to see exactly what items are available. There are a few ways to do this, but the most effective way is to use software that can keep track of inventory levels in real time in order to help forecast inventory levels, gain seller insights, and view order loads. This way, brands can see exactly how much stock they have on hand and can make adjustments accordingly.
4. Run paid ads to target overstock
Brands can run paid ads to target shoppers looking for deals. Ads such as PPC campaigns can help identify what keywords shoppers are using to search for deals on overstock items. They can also use retargeting to reach shoppers who have visited their site but didn’t purchase anything. By showing these shoppers ads for the items they were interested in, a brand can increase the chances of making a sale..
5. Turn your overstock into something new
One way to move excess inventory is to find a way to repackage it in order to maximize its appeal. This could involve changing the color or design of the packaging or bundling items together with other products. For example, a brand could create a package of related items at an attractive price point and market it as a special bundle.
Take control of overstock with end-to-end inventory management
Handling excess inventory on your own involves managing a lot of manual tasks simultaneously, which can be complicated, especially for brands that sell on marketplaces. With tech-enabled end-to-end inventory solutions, you can automate a number of tasks to make it easier to manage and monitor your inventory during peak busy seasons. Solutions like Cymbio offer a number of helpful features that help you with order fulfillment so that you can free up capacity to focus on other tasks4. Some of the things Cymbio can help with include:
- Inventory management:With real-time inventory updates, brands can be sure partnered retailers have an accurate inventory in order to sell via dropshipping and marketplaces
- Shipping automation:Tasks such as packing slip creation, shipping notifications, returns, and refunds can all be automated to simplify the order process.
- Connect to marketplaces:With our extensive network of retailers and marketplaces, we can help connect brands with new channels to sell their products to a wide audience.
To Wrap Up
By setting new habits when it comes to tracking inventory and managing overstock, you’ll be able to lower storage costs, increase sales, and optimize efficiency during the busiest quarter. Solutions like Cymbio offer a reliable way to automate different inventory-related tasks so that you can more easily supervise your inventory levels, market and sell items on marketplaces, and stay on top of overstock management.