Shift surplus stock in 5 smart steps

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According to retail management platform Vend, managing stock requires attention to detail, an awareness of product movement and a clear view of inventory. That said, no matter how well you plan you can still end up with excess inventory thanks to issues outside of your control. But there are ways to manage this.

Here, Vend and its customers share five smart ways to take that surplus stock and the challenge it represents and turn it into an opportunity.

1. Refresh, re-merchandise or re-market

Are you marketing the product properly? Sometimes it isn’t so much the stock that’s the issue, but how it is perceived by the customer. If you’ve got a shelf of surplus that nobody wants, try to refresh your marketing efforts. It’s a good idea to do this in conjunction with repositioning the products in the store. Switch up their shelf arrangements or put them in a different place. Also, consider refreshing the attitude of your staff as they can be key to engaging with customers and shifting those products.

“As I always say, you can have a million-rand worth of stock in your stock room, but if no one is buying it, you’re on zero. I’d rather have one hundred rand in cash than a million rand’s worth of old, dead stock,” says Jonathan Franco, founder of Cape Town store Third Eye Wear.

“What differentiates our store from others is that many of them keep their products locked away and customers can find that very intimidating. Whereas in our store we try and create more of a fun environment. Everything is open, everything can be tried on. We encourage Instagramming and live videos,” says Franco.

2. Invest in the strategic discount

If you don’t have any luck, then consider lowering your prices incrementally. You can use this as an opportunity to create a sales event such as a flash sale or running a storewide promotion. This can have the added advantage of bringing customers to your store. Add in some bells and whistles, build the ‘if I don’t get it now, I’ll lose out’ mentality, and make it more about the experience than the sale.

It is important to time your sales carefully and to minimise the times you do them. Too many will lose engagement and allure, and customers will end up waiting for your sales before they do their shopping, notes Vend. Also, use this as a chance to capture critical customer data that you can add to your loyalty programme or newsletter. Of course, discounting isn’t for everyone, especially those stores that cater to high-end markets and need to maintain a specific image.

“Often issues come into play when items have been sitting for a while and have a broken size curve, which means they are no longer contributing to telling the seasonal story they were intended for,” says Betty Hardcastle, co-owner of Cape Town baby clothing business Petit Love. This Vend customer adds, “In this case, there are strategic performance levers we pull such as promotions, clearances and multi-buys.”

3. Bundle up

Bundling is the second most popular pricing method for retailers across all sectors, according to Software Advice, with an impressive 90% using this tactic it in their business. Climb on this bandwagon by grouping certain products together and selling them for a lower price than if they were sold separately. You can bundle multiple units of the same item, add complementary products to increase the value or pair slow-moving products with popular ones.

“Bundling works wonderfully for us as a brand,” says Hardcastle. “We’re in a retail space where our customers already have so much to worry about, so any way that we can contribute to making their purchasing decisions easier is important to us.”

4. Incentivise and inspire

Low-cost items are perfect for this strategy, says Vend. If they just won’t sell, use them as giveaways or incentives that inspire people to sign up to mailing lists, newsletters and other marketing initiatives.

5: Sell them to online marketplaces or liquidation companies

Online platforms such as OLX or Gumtree can work as an alternative sales space to shift excess stock that just won’t move. You might not see a profit, but they’re a great way of getting rid of stock.

“These kinds of websites normally have a massive subscriber base, so if you put your product on there, your brand is all over it too,” says Franco at Third Eye Wear.