Old and slow moving stock can be a real problem for a business. It can tie up cash in the business and take up floor and window space that would be better employed showing off some new fresh items.
It makes sense therefore to look at ways of moving this stock on and turn it into cash which can then be used to buy faster selling lines.
Some of the options for moving old stock include: –
Sales – discounting the price at which you are willing to sell slow moving lines. You don’t have to be a retailer to use this strategy. Imagine if you are a pub struggling to get customers in during the cold winter months; why not have a sale to drum up business and clear the cellar.
BOGOF offers – ‘Buy one and get one free offers’ where the item offered for free is you old, slow moving and obsolete stock.
Incentives – use your old stock as a reward to customers to encourage them to do something that you want them to do. For example, if they place an order over a certain value then you give them a free item, or if they introduce a customer to your business then again they get a free item.
‘We screwed up marketing’ – send out letters or emails to customers with a headline saying ‘We have made a serious mistake’ (they are bound to read on). The marketing then goes on to say ‘They say that one person’s misfortune is another’s good fortune! Well, i’m contacting you because we have made a mistake – we have ordered too many widgets and we have 30 going spare which we don’t need. Well our misfortune is good news for you as you can snap up these fantastic widgets for just £40 instead of our normal selling price of £100 – saving 60% on each. By admitting a mistake you grab customers’ attention and help them understand that they are getting a real bargain.
On-line auctions – use websites dedicated to bringing buyers and sellers together at bargain prices. Become one of the new breed of ‘super sellers’ who use online auction sites as a key sales channel. The advantage is that there a minimal marketing costs and you usually only pay the auction site when you make the sale.
Finally, remember that the original cost of the stock and the normal selling price are irrelevant – if you can’t sell the item then its opportunity cost is zero and anything you get for it is a bonus.