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Selling Overstocks Before Year-End

November 21, 2018 by admin

It’s November and the end of the year is fast approaching. It’s time to move out inventory that has been sitting in your warehouse and not selling well. There are a number of good reasons to reduce your inventory this year as opposed to waiting until next year. Some of these include:

Food Overstock Clip Art - The Lansing Group

Generate cash before year-end. It’s usually beneficial to bring in cash rather than have it invested in inventory of slow-moving product than to continue to keep it in your warehouse and carry it on your books.

If you have goods that have not been selling through your normal channels, there are alternate channel retailers who might be looking for these products to round out their Holiday sales offerings. By selling to the appropriate accounts this will not affect the sales of your current customers.

Discount and alternate channel retailers are looking for products they can buy NOW to sell for the Holidays. Once they fill their open-to-buys they may not have the money to purchase until after the New Year. The sooner you can offer products at the end of the year, the better the opportunity to sell them.

January is often a time when retailers clean out their remaining Holiday stocks which can delay their purchase of new items. Consider selling your overstock products now which might be a better time than after the first of the year.

Being watchful of product dating is always important. If you have products with Best By or Use By Dates of March or April, you should be able to generate more money for them now with longer dating, rather than waiting until January or February to sell them.

Your company may have some tax reasons to reduce your inventory before year-end. If so, now is the time to do it. (Be sure to check with your tax advisor on this point.)

You could have small quantities of a variety of items that have just been left over from previous orders or even returns during this year. If you can group together you can offer smaller second level accounts a good product combination which they could use as Holiday offerings. This would clean-up some small quantities of products in your warehouse.

Now is a good time to generate end-of-the year CASH !!  Plus, give your warehouse a Holiday present by cleaning it up of older inventory!!

To discuss overstock or problem products you want to sell, contact Dick Lansing at
The Lansing Group:

Email: dlansing@thelansinggroup.com

Phone: 312-524-6117

Minimizing The Problem of Problem Inventory

September 21, 2018 by admin

Problem inventory is best described as any merchandise that cannot be sold to your regular customers at everyday wholesale or normal promotional pricing levels. More specifically, products that need to be deeply discounted to sell are considered problem inventory. These include, but are not limited to, overstock, excess inventory, short-coded or out-of-code items, package changes, returned goods or damaged products.

The good news is that through proactive inventory management, the number of problem products can be reduced. Of course, once an item becomes a “problem”, the sooner it can be sold the better. One of the keys to successful inventory management is knowing when the products are turning into problems and then trigger the reduced-price sales process in a timely manner.

Food Overstock Clip Art - The Lansing Group

There are several positive benefits to quickly selling off problem products:

  • Generate capital. Product that is sitting in the warehouse, which a manufacturer or wholesaler is unable to sell at full price or as part of a regular promotion, is costing money. The sooner it is sold, the quicker money flows back into the company, even if it is sold at a reduced profit, breakeven or is sold below its cost.
  • Generate cash flow. Logically, bringing in money for product that is sitting in a warehouse is better than having it remain in storage with no or very low sales. At a certain point, bringing in cash is better than the option of further reductions in the selling price.
  • Free up warehouse space. Products that are not turning take up valuable warehouse space, which can be used for faster-turning or fresher items that can be sold at higher prices compared to problem inventory.
  • Lower monthly charges. Continuous monthly charges accumulate, particularly if the product is stored in a public warehouse. These warehouses charge for storage regardless if a product is “fresh” or has problems. Thus, the advantage for an immediate sale if there is problem inventory.

The longer a manufacturer holds inventory that must be sold outside of regular channels, the closer it gets to the Best By Date, Use By Date or Expiration Date. The older a problem product becomes, the lower the sales value to a buyer. As a result, the selling price continues to decrease the longer it is held in inventory.

Long stays in warehouses opens the chance for product to become damaged. While this doesn’t happen often, if a product that cannot be sold is sitting on the warehouse shelf, there is a chance that something could happen to it and further reduce the selling price or render it of no value.

Short dating is an issue that can cause problems down the line for the lifecycle of inventory. This means that the product’s Best By Date, Expiration Date or Use By Date is getting too close for your regular customers to buy the product. The key is to identify these dates long enough in advance to be able to sell the products for the maximum amount of money.

So how can manufacturers and wholesalers best manage inventory? The key is to have an inventory management report which is reviewed at least monthly. If your company doesn’t have such a report, there are numerous inventory management systems on the market that can easily be bought through independent software companies. Another choice is to design a system in-house, if you have the need and resources to do so.

If a manufacturer uses an outside warehouse, that facility should provide a monthly inventory report which contains the information needed to review all aspects the current inventory situation.

Whatever system you use to monitor your valuable merchandise, it should track the dating and, as previously mentioned, be reviewed monthly. It’s amazing the number of companies that suddenly realize there is short-dated product that they didn’t know they had in inventory. Today’s computerized and customized inventory management systems are a boon to our business—get one ramped up to do the heavy lifting for your stock and see the change to your bottom line.

To discuss overstock or problem products you want to sell, contact Dick Lansing at
The Lansing Group:

Email: dlansing@thelansinggroup.com

Phone: 312-524-6117

Overstocks: How to Make the Best of a Bad Product Situation

July 12, 2018 by admin

Food Overstock Clip Art - The Lansing Group

Airtight inventory management is one of the keys to running a successful and profitable business. Turning your inventory while it’s fresh and attractive to consumers is pivotal to your bottom line. Unfortunately, in today’s unpredictable marketplace, many things can happen to cause products to be sold for less than originally anticipated as well as outside of your regular distribution channel. These types of products are generally referred to under the category of overstocks. They include a broad range of product issues which are discussed below.

For most small and mid-sized manufacturers overstocks don’t occur on a regular basis. Yet when a problem does arise, the difficulty of moving merchandise may be compounded because many companies don’t have the connections to sell these products to the appropriate retailers.

I’ve been in the business of working with companies in the grocery, foodservice, health & beauty and housewares industries buying and selling problem or overstock products for more than twenty years. In writing this blog, my goal is to help manufacturers, distributors, wholesalers and retailers learn about the overstock business.  I’ll provide steps to take to stay ahead of potential overstock issues and suggest ways to achieve the maximum amount of value for your product.

Having an excellent inventory management system is only one step in the process. Overstock situations happen, even with the most conscientious planning and oversight. Being knowledgeable about how best to manage an overstock situation can reduce losses and recover greater sales dollars from a tough situation.

I will discuss how The Lansing Group can help you sell overstocks to protect your current business channels and achieve maximum return.

Let’s look at the most prevalent causes of product problems:

  • Overstock – In this case a manufacturer has too much product on hand and wants to sell it quickly. This is also known as excess inventory.
  • Short coded – Products that have date coding (for example a Sell By Date or Best By Date) in the near future.
  • Returned products – Products sent to a retailer, distributor or wholesaler that didn’t sell and are shipped back to the manufacturer.
  • Refused products – A retailer, distributor or wholesaler has placed an order for a product that the manufacturer produced, but then cancelled.
  • Warehouse changes – The need to relocate a stored product. It may be more efficient to sell the existing inventory off rather than move it to a new storage facility.
  • Package changes – Any updates to current packaging, now means the old packaging is unusable.
  • Ingredient changes – Similar to package changes because the label now has new wording and the packaging has become obsolete.

The list of reasons that can cause a product’s value to be reduced is long and these are just some of them. There is no end to the strange issues that can occur that are outside of the manufacturer’s control and create a need to sell a product at reduced cost to an alternate channel.

In upcoming blogs, some of the issues I will cover include:

  • How to be sure your overstock product is NOT sold to your current customers
  • How to improve your inventory management to reduce overstocks.
  • How to price products in the overstock marketplace.
  • Product dating and its relationship to pricing.
    A review of the outlets that buy overstocks.
  • How best to move obsolete packaging.

In my next blog, I will look at the ways you can minimize the problem of problem inventory!!

To discuss overstock or problem products you want to sell, contact Dick Lansing at
The Lansing Group:

Email: dlansing@thelansinggroup.com

Phone: 312-524-6117

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