We all know that the holiday season is one of the most profitable times for retail stores. But what you should also keep in mind is that inventory management during the holiday shopping rush can be quite challenging. With many products going in and out of the store there is a considerable number of logistics problems that may occur. But one of the biggest questions that are often answered too late is: What should you do with the leftover inventory?
This is what we’ll answer in this article – because inventory management doesn’t mean only what you do in preparation for such an event. It’s also important to be aware of how to manage the remaining stock. This way you can deal with it in the most efficient and economical way.
1. Sort your leftover holiday inventory
First things first, assess what types of items you are left with. Some of them may be seasonal and you need to check if they would be desirable in the next year. Look out for items that are just trendy or that are specific to the current year.
But be careful not to hold on to an extensive amount of items, as storage space can get overcrowded very easily. And you need to keep some availability for other items that will come in stock during the following months. Keeping your inventory occupied with items that may not bring you profit can be detrimental to your business.
2. Analyze why your items remained unsold
We encourage you to take some time and look for the reasons why those items remained on the shelves. It’s important to learn from mistakes and unpredicted situations so that you can be better prepared in the future.
Maybe you ordered too many items from a certain category. Or perhaps the pricing was inappropriate. People may perceive something with a lower price as being less qualitative. Or the opposite – maybe they didn’t see the value in a more expensive item.
Another problem could be the placement of the products. Maybe you put them in a spot where clients cannot notice them easily, as others could stand out. So if you want to increase sales, you should predict where your clients will focus most of their attention.
An efficient and reliable way to learn from your data is by looking at specific inventory analysis reports. Such pieces of information can be accessed through inventory management software. For example, they can accurately show you which categories of products were not the top options for your clients or how long it took for certain products to be sold since they were received in your inventory.
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3. Make a plan for the leftover inventory that needs to go
Now it’s time to actually free up some space. But not just any type of sale will do. You have to decide whether multiple stages of markdowns or a flash sale are more appropriate for your business. The former means that the prices won’t go down too fast, but it doesn’t guarantee that you’ll sell as many items as you want. The latter could be a good choice because it instills a sense of urgency into the client’s mind. This will make it more likely for them to indulge even though they weren’t planning on buying anything. On the flip side, a flash sale will require you to make considerable discounts that don’t amount to much profit in the end.
You should also find an appropriate way to communicate the sale to your clients. For this, you should find the message that resonates with the audience, as well as the right format – it could be in-store print materials, flyers, newsletters, social media posts. Or you can try anything else that’s likely to get their attention without distracting from the main purpose.
Hot Tip: Try bundling your items to create a more enticing offer.
One way to do this is by grouping items of the same sort into a package. This works well if you have more variations of the same product (different colors/ingredients/etc.). Also, try to bundle complementary items (e.g. personal care products), as clients might see more value in such a purchase. Last but not least, you can group slow-moving merchandise with more popular items. That way you can sell those without much of an effort and in a way that will integrate well with your client’s buying preferences.
4. Consider charity or other CSR initiative
There is no right or wrong time to be charitable. So you should consider giving away your leftover inventory to the local charity organization. This is a great way to repurpose items that cannot be sold or to prevent them from expiring in your storage.
5. Liquidate as a last resort
If nothing else works, we suggest you sell the leftover holiday inventory to one of those companies that specialize in liquidating. This is the easiest way to free up storage space fast. But it certainly isn’t the most profitable – liquidators only buy items in bulk and for very low prices.
Now you know how to manage your leftover inventory after the holiday season. We hope that our tips will help you get a headstart for the next year.
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Ștefania Bulgaru is a Digital Marketer for Megaventory, the online inventory management system that can help medium-sized companies synchronize stock over multiple stores. She believes that good communication can solve almost any problem and she likes to stay up to date with the latest digital marketing technologies.