When Should You Liquidate Inventory: Tips For Optimal Inventory Management

You might be one of the manufacturers, retailers and wholesalers who keep on accumulating

non-performing inventory in the warehouse until a yearly sale is conducted. By the time you decide to liquidate inventory accumulation of the problem merchandise you will have suffered great losses in storage, insurance, security, maintenance and space restrictions, enough to offset any benefits that accrue when you finally liquidate the inventory.

Instead of waiting to liquidate inventory of dead stock yearly, the best and most shrewd thing to do is to institute regular initiatives to liquidate inventory of non-performing stock. It is supposed to be a regular, consistent and reliable way of managing your inventories optimally. Whatever is not moving or is moving too slowly has no business being in your store. Your warehouse space should only be occupied by the moving stock that is making adequate profits to cater for the storage and related costs.

The best performing online eCommerce entities know how to liquidate inventory of dead stock before running into losses and to create space for what is moving in the market. If this is not made into a 12-month activity and is left to an annual event, then pretty soon you will have to stop buying what is selling in the market. This is because all your money, space and manpower will be engaged in the management of the non-performing inventory.

Any healthy business must have non-performing inventory now and then. No business can operate without warehouse damages, returns, rejects, refurbished goods, excess inventories etc. These are the sources of non-performing merchandise. The difference between profitable businesses and the companies in a perpetual fiscal deficit is not in the amount of dead stock each has in a year but in how they manage this dead stock. The best businesses have made it a practice to liquidate inventory that refuses to sell without accumulation and replacing the same with what is selling. So while the companies with a regular liquidation system make profits, the ones who wait for an annual auction to liquidate inventory collections of dead stock will be making great losses, or at least suffering a dent on their marginal profits.

Hiring a liquidation company to liquidate inventory or non-performing merchandise regularly and as an ongoing process, helps you to coordinate your business in focus to what the market wants at any given time and also gives you a greater chance of getting maximal returns from your merchandise. This is because you are never desperate to sell it off, like most companies are in annual auctions of dead stock.

by: kathleen

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