How do you guys deal with excess inventory?

New Member
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I'm working on a startup idea to help Shopify merchants manage their end of life/excess inventory and I wanted to ping the community and hear your thoughts. A few questions I had were:


1) What is the hardest part about dealing with excess inventory?

2) Could you describe the last time you had to deal with inventory you couldn't move through your shop? Why was it so hard?

3) What solutions did you employ to solve this problem?

4) What solutions have you found and what do/don't you like about them?

Reply 1 (1)
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The following are the hardest part of dealing with excess inventory:

1.Excess inventory ties-up much-needed working capital

2. Excess inventory increases carrying costs

3. Excess inventory can lead to poor quality goods and degradation

4. Excess inventory can result in stock obsolescence.


The following are the ways you can solve this problem of excess inventory:

Return for a refund or credit:  If your supplier allows this and will give you a full refund or a reasonable discount, then this might be the best option. You’ll probably take a hit on shipping and handling but at least you can swap out the dead excess for something you can use.

Divert the inventory to a new products:  Perhaps the raw materials or components can be used in other lines or at other plants. The inventory might need some rework, so the cost of that should be taken into account. Some companies have created entirely new products based on scrap and overage from others. 

Trade with industry partners: Competitors might be your friends when it comes to sharing inventory and supplies. The items taking up space in your warehouse could be exactly what another company needs right now. In return, they might have something you can use. This type of interaction not only helps your inventory management, but it builds relationships, which are always valuable. 

 Sell to customers: The route for this depends on whether your customers are businesses or consumers. If you sell directly to distributors or businesses, then approaching them with a different or special deal on finished goods might work. You might try packaging your product for a discounted price. Regarding end-users, there are many who don’t care about having the latest make or model and will gladly buy your out-of-date inventory.

Consign your product :Independent distributors will allow you to maintain ownership while taking a cut of sales, often a 75/25 split. Consignment may be virtual, which means you keep the goods and are responsible for shipping them once a sale is made. You will need to be prepared to respond quickly to sales. Physical consignment means the distributor stores the goods and handles delivery. 

 Liquidate excess inventory :In this case, you’re looking to just get rid of it. A liquidator will buy up what you have for a negotiated price. That’s all you will see from the deal.


  Auction it yourself : With the availability of online outlets such as eBay, you can sell inventory directly to whoever wants it. This requires staff time and can be a slow and tedious process. Not everything will sell, either.


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