The perfect store doesn’t have very many items – just enough for all of its customers and it sells out just in time so that there’s no overstock. Of course, that’s just a dream. The reality is either there’s not enough stock for demand (which isn’t great) or there’s too much stock for demand (which isn’t great).
If you have too much stock for demand, what do you do? How can you still make money from it? If you price it to clear then you’re willingly taking a reduction in profit on it…and if it doesn’t sell at all (and assuming you can’t return it to the manufacturer for a credit) you may have to spend money to get rid of it. Here are some ideas to help you avoid doing that:
- Save it: Can it be held in storage for next year? You can order less and move it at full price next year. If it’s small enough then warehousing costs are negligible. If it’s too big, this might not be an option for you.
- Give it away: Can you get some good press out of the situation by donating it to a good cause? You might be able to get a “receipt in kind” AND some really good press if you find an appropriate, worthy cause to give the product to. Some high profile causes might include underprivileged children, homeless people, seniors, or children of soldiers serving overseas. Make sure the press knows what you are doing and make it a big deal.
- Modify it: Can you sell it as something else? Depending on the product, consider modifying it slightly to sell in a different way. Can you add something, take something away, give it a paint job, or repackage it as something else? Your back-to-school overstock can get Christmas stickers stuck on the package and it becomes stocking stuffers, for example.
- Package it: Can you pair it with more products? People love to buy baskets of products. Why not pull together several items, including this discounted item, and arrange it nicely in a basket. You should be able to charge near-to-full price for the entire basket even with one or two discounted items inside.
- eBay it: You might not get full price in the store, but what about on eBay, the world’s biggest online auction? Throw it on a discount table in your store and put it up online. If it doesn’t sell on eBay, at least you haven’t lost anything.
Don’t forget the many other “tried and true” ways that companies try to move their discounted merchandise: hold a sidewalk sale, hold a back of the truck sale in the parking lot of a mall, set up shop in the cafeteria of a corporate office; it all depends on what the product is.
It’s a shame to take a loss on items. Don’t pull out your discount price gun just yet. Instead, try to get creative and find ways to re-sell it in a different way. You’ll increase your profits while still moving merchandise.
