How to deal with slow moving inventory

4 tactics to deal with slow-moving inventory

Inventory management includes handling both the slow and fast-moving inventory well. You must have the right tools in your kitty to identify the slow-moving inventory items and hurry their sale.

Your valuable capital and resources are tied to the slow-moving inventory. You also have to incur the carrying costs. Thus, if you do not sell slow-moving inventory faster, you face losses because you could have used your resources, capital, storage space, and carrying costs for fast-moving items.

Identifying the slow-moving inventory is good, but you must also determine a strategy to deal with it. Here are a few tactics to deal with slow-moving inventory:

Provide discounts or promotional offers

Discounts attract customers. It is a tried-and-tested method with excellent results. These discounts can be temporary if you just have to finish your inventory. But, if you are competing with another player or if your product is about to become obsolete, keep discounts for longer time.

You can also offer other kinds of discounts and promotional strategies. Customers buying your slow-moving item can get:

• Early access to new products
• Additional small items as freebies
• Discounts on other products

However, you must keep a check on whether the discounts have an impact on demand or not. If not, you need to offer more discounts or apply another strategy.

Improve the product’s or its display’s attractiveness

An item may be slow-moving because of its looks, packaging, store display, or marketing strategy. These can be the reasons for customers’ negative reactions to it. So, you must make necessary improvements such as:

• Change the display position and place it where customers can see it prominently.
• Improve its marketing copy to attract customers.
• Make relevant modifications to its packaging.

Not selling the food items at the right time

Every food item comes with an expiry date. As a supermarket employee or owner, you must track every product’s expiry date and try to sell them before the date. If you miss it, the product becomes unsafe for consumption. And it is also a loss to your business since you cannot sell it anymore.

Bundle it with the same product or a different product

Longer hours of transportation of food products from the warehouse or production units to the supermarket also contributes to food wastage. There is a risk of food getting stale during transit. In such cases, you must sell it as soon as possible.

Solution for managing or preventing food wastage

You can bundle multiples of the same product and offer it at a special price. This tactic helps you sell volumes of the slow-moving product because even one sale means multiple products sold. Something like ‘Buy 2, Get 1 Free’ can also work because the word ‘FREE’ is a big attraction.

You can bundle multiples of the same product and offer it at a special price. This tactic helps you sell volumes of the slow-moving product because even one sale means multiple products sold. Something like ‘Buy 2, Get 1 Free’ can also work because the word ‘FREE’ is a big attraction.

The catch is that customers must see a perceived value in your offer.

Donate or liquidate slow-moving inventory

Despite employing these tactics, you have to take a difficult step if your slow-moving inventory still doesn’t move. So, either you liquidate it or donate it to a charity, resulting in losses for your business.

If you liquidate it, you must contact a liquidation company. The company will buy your product at clearance prices. You will surely suffer losses, but your store shelves will be free from the old, dust-gathering items.

You can donate them to a charitable organization. You will not receive any money for it, but you can get a tax deduction (depending on your jurisdiction of operations). On top of it, you will be engaging in corporate social responsibility. You can even market this on your website to attract customers.

Demand planning

Your ERP system helps you forecast product demand from customers’ historical data. This includes data on customer demographics, historical purchases, and buying behavior. Based on these demand forecasts, you can plan on ordering your inventory.

You can also study the historical waste patterns in your supermarket. And avoid repetition by managing it well.

Slow-moving inventory is a burden no retailer wants to carry. You have incurred costs on it, and you expect to earn profits. But when it’s high time, you must part with it either at less profits, no profits, or losses.

The best solution is to implement an ERP system to manage your inventory. And who better than Websys Infotech to provide you with its efficient solution? It is a perfect fit for all kinds of retail businesses. You get complete visibility of your inventory and finances to enable proper management.