If you are reading this article then there is a very strong probability that you have some dead stock in your storage and you are having problems in handling it. In this article, we will talk about some things that you can do to slowly get rid of the dead stock and then buy the stock that is selling and making you a profit. And if you don’t have dead stock and you want to make sure that you don’t get dead stock then we will also share how to avoid getting dead stock.
What is dead stock?
President of Acorn Distributors Inc. Jennifer Rosenberg said “We make money by moving boxes, not by storing boxes.” So any stock that is just sitting in your storage and not selling is dead stock. As it is taking up the space which can be used to stock selling products.
How to deal with dead stock?
There are few different ways which you can use to get rid of the dead stock.
- Wrong purchasing decisions.
- Poor management of inventory.
- Poor communication.
- Defective product.
- Lack of proper marketing.
Wrong purchasing decisions.
The wrong purchasing decision is one of the easiest way to gather dead stock. Mostly what happens is that. A seller sees a new product and the product looks promising that it will be selling very easily so the seller does not do the research to see the search volume of the product in question to see if the buyers are searching for the products or not and if they are searching about the products then where they are in the marketing funnel. All of this data should be gathered and analysed before buying any products to avoid dead stock. This why it’s always said that data is very important and it helps us in making an informed decision.
Poor management of inventory
Now let’s say that you have done your research gathered and analysed all the data that you have collected and based on that data you have made an informed decision and bought the product, but if your inventory management is not up to the make then you will face dead stock. This is because if you are not good at inventory management you can clog up the system and then you will continue to get the new products when you do not demand for them and thus you will end up with dead stock. This leads us to our next point.
Poor communication.
This can be seen as the continuation of our last point. The demand for seasonal products goes down as the season comes to an end but if you have not communicated to the supplier that you don’t need products. Then the supplier may send you another shipment of products and those new shipments will become dead stock as the season is gone. An example of this is back-to-school time. If you received a shipment for back-to-school products after the time has ended then you will be stuck with the products and no one would be looking for those products.
Defective products.
Defective products are one of the reasons why you get dead stock so fast. Imagine that you sell smartphones and one of your customers puts on a review that the camera is not good. Then anyone who will read the review will not buy the phone. This will cause the dead stock. I presented an extreme example. This could be as small as the wrong size or wrong colours in clothes.
Lack of marketing.
This is quite obvious. If the consumer does not know about your product then there is no way that your products will sell. Now marketing is a very big area and thus can not be discussed in this article.
How to deal with dead stock.
Get a good inventory management system.
Just in the previous points, we discussed that having bad inventory management can be one of the causes for the dead stock. If this is the case with you then the solution is pretty simple. Invest in some good quality software that can help you manage the inventory and reduce the chances that you will get inventory that would just sit in your warehouse and not sell. There are some good systems that can also help to automate some aspects of inventory management.
Select different locations.
There are some products that sell well in certain locations. So, if you identify that your products or products similar to yours are selling well in other locations then it’s better to change the location. E.g., Winter clothing would sell better in closer regions so it your dead stock is winter clothing then you should change the location where it’s cold and people are buying winter clothes.
Detailed agreement.
When buying the products always have an agreement with the supplier stating all of the details and conditions properly mentioned in the agreement. These conditions can be according to the preference of the seller. E.g., You can mention in the agreement that if there are any products that are not selling and they are not damaged then the supplier can return the products. For the supplier, this would not be an issue as they can just resell those products to sellers who are selling those products.
Create urgency.
If you cannot send back your items to the supplier then it is best to create urgency around the products to force the seller to buy the item. There are different things that you can do such as putting a limited-time offer or put a sticker that says only a few items left in the stock. This would create artificial demand and force a person to buy the product.
Create bundle
If you dead stock then you also have stock that is always flowing. It’s perfect to make a bundle of your dead stock with high-selling products. However, there is one thing that should be kept in mind when creating the bundle both products should be related. If you are making a bundle of a laptop with clothes then this would not make sense. Technology products should be bundled with other products of the same nature.
Free shipping.
Once you mention that there is free shipping on any products people become much more interested in buying your products.
