Inventory management is one of the keys to online retail success. And decent inventory management often requires the occasional purge. Slow moving, out-of-season goods will need to be removed. Space and money must be made accessible for newer or faster selling items.
Many retail companies have found ways to successfully clean aging out or unwanted inventory. What follows are five suggestions to assist spring clean your warehouse.
1. There’s a Difference Between a Sale and Clearance
In retail, the term “sale” has two meanings. First, a”sale” is when a customer purchases something. In this context,”sale” can explain any retail transaction. Secondly, online retailers can place items on”sale.” In this latter scenario, a product or products are offered in a temporary, lower price. “Sales” are supposed to increase profit by increasing the amount of units sold.
“Clearance,” then, is a unique kind of sale meant to decrease inventory, likely to zero. Therefore, it can be carried out rather differently than a sale intended to increase profit. The things put on clearance represent a sunk cost, or a cost that has already been incurred and can’t be fully recovered.
Last year’s parka fashions are not really worth as much when it’s 70 degrees out, and might be worthless if you attempt to hang on to them until next winter. Therefore, the cash invested to buy them is already gone.
So here is your spring-cleaning, inventory-reduction tip: Sell clearance items economical. Decide on a goal such as,”I wish to be out of stock in a couple of weeks.” Then specify a price and after three days do a small test. Are you currently on pace to sell out in a couple of weeks? If you’re, keep going. If not, you might need to decrease the price further to sell out on schedule.
2. If You Don’t Sell Wine, Inventory Will Not Get Better with Age
There are hardly any retail products that get better with age. Wine is an illustration of inventory an internet retailer should keep every year.
This spring, examine the seasonal items which you have left . Will these items age nicely in your warehouse? Will boxes fade? Dust collect? Is there a chance the manufacturer will replace the item with a newer version? Or maybe update the packaging?
It’s much better to sell a product at cost or even at a loss and regain some of your investment than to have to hang on to it only to discard it later since it’s no longer salable.
Here is the tip: Do not carry over seasonal stock unless you’re certain you can get complete retail for it next year.
3. Offer Clearance Items to Your Clients First
When you’ve decided that certain items will need to go, consider offering those items to your best customers .
As opposed to simply dropping the prices on clearance items and sending out bulk emails, consider selectively targeting those shoppers that purchase from you over and over.
You can send an email to your top 10 percent of consumers. Let them know you will be placing the item or items on clearance following week, but will give them a opportunity to buy the items in the discounted price beforehand using a coupon code.
This way, you create your best clients feel like, well, your best clients. They could start to trust your company more, understanding that you recognize their worth and provide them early access to special offers.
4. Merchandise with Meaning
On-site merchandising may have a significant effect on sales. If you wish to rid your warehouse of out-of-season, slow-moving products, think about merchandising these products on your website.
This is one example. Contain clearance offers on your home page or on each item page. Macy’s, the omnichannel merchant, did this on its home page. The top part used a large red banner to market its present clearance sale.
Macy’s merchandises closeout items at the top of its home page.
Further down the home page, you could see examples of these things being supplied.
A meaningful quantity of space is given to the clearance sale.
5. Sell Clearance Items on Marketplaces and Auction Sites
Bear in mind that you don’t have to market clearance things on your own website. For many online merchants, placing anything available may struggle with their premium brand. They’ve spent plenty of time, money, and effort establishing their company as a leader in customer service or product quality and selling closeouts wouldn’t help their hard-earned standing.
In these circumstances, you can post closeout items on marketplaces such as Amazon or Rakuten and on auction sites like Ebay. Items can be listed under an alternative business name, or even sold as lots to other retailers.
As is frequently the case with stock spring cleaning, you may not recover the entire amount you invested in the things, however you’ll get some money without, necessarily, impacting your own brand.